European Gaming Lawyer magazine Autumn 2016 | Page 33

iGaming Mergers & Acquisition
Q&A with Nestor Nestor Diculescu
Kingston Petersen

H

Ana-Maria Baciu

Cosmina Simion

ow should the owner(s) of an
iGaming business prepare for
the sale of their company?
To put it in simple words,
irrespective of what jurisdiction
we talk about, or even industry, to make it saleable,
the owners of a company should of course make it
look attractive. In the end, however the potential
buyer will look for value for money.
Now, when we apply this to the igaming businesses
operated in regulated markets, the minimum
required would be for the company to be regulatory
compliant, have a sizeable players data base, offer
decent enough content, be in good terms with the
regulators and, of course be profitable or have the
potential to become profitable.
Having said that, when preparing for the sale, one
may wish to clean the house before the beauty parade.
Depending on the size of the target company, the
number of jurisdictions it operates in, the content and
products it offers, the cleaning due diligence may be
more or less sophisticated.
Where the sale/merger might occur at the level of
the mother company, implications on each and every
territory should be looked at, as no one hat fits all
solution can be found in this industry. Since, generally
speaking igaming licenses are issued conditional on
the bona fide of the beneficial owners, any changes at
that level may require pre or post approval or at least
notification to the regulators in the relevant territory.
Also when having a desired transactional structure in
mind, one should not overlook the tax implications
and the fact that, in general, licenses are nominal and
thus cannot be transferred from one entity to another.

And, when we talk about listed companies one must
never overlook the conditions and timing restrictions
that a public company comes with.
Last but not least, or perhaps to start with, the
igaming business owners should have trusted and
capable business advisors by their side. Again,
depending on the size of the company, that may mean
financial advisors, business advisors, investment
bankers etc. and always, lawyers.
It may be difficult to compare between law firms
when selecting the proper M&A exit legal advisor.
From a seller’s perspective, the igaming owner
should look at the willingness of the legal advisor to
do the pre-sale work on consulting on the growth
strategy, be actively involved in the exit planning.
Where some firms have the capacity, industry
know-how and willingness to work with the
company CEO for many months, and sometimes
years, to increase the intrinsic value of the business,
other firms believe their job is just to sell the
business. These firms don’t include any significant
work on helping the management team increase the
value before the transaction.
What due diligence issues should there be a
focus on?
In our view, focus should be on three aspects, in
a random order: attractiveness of the business,
regulatory compliance, transactional implications.
While it may look somewhat frivolous in
nature, the attractiveness, as we chose to name it
here, plays an important role in the existence and
completion of an M&A igaming transaction. By
attractiveness we refer to the looks and feel of the

European Gaming Lawyer | Autumn Issue | 2016 | 33