Malta offers lucrative M&A opportunities, explain David Pace and Russell Mifsud of KPMG Malta
With approximately 300 iGaming companies operating in Malta (and growing) coupled with top institutional support for this vibrant industry, Malta could be a land of opportunities from a deal making space. KPMG explains why.
By combining our deal making and gaming industry specializations, close relationships with industry stakeholders, and the reach of our global network, we are in a unique position to offer significant value-added across functional and geographical boundaries.
IGAMING IN MALTA – A LUCRATIVE INDUSTRY
In 2016, it is difficult to envisage Malta without an iGaming essence. Today, Malta hosts in excess of 280 remote gaming companies holding 460 plus active licences locally (an increase of 21% over 2014) for online offerings such as casino-type games, online lotteries, poker derivative games, peer-to-peer (P2P) gaming and game portals, and sportsbooks amongst others. With some of the world’s largest companies such as Betfair, Unibet, Tipico, Betsson, Mangas Gaming Group, Mr Green, and LeoVegas operating in Malta, together with an attractive pool of smaller but ambitious outfits and niche players, the remote gaming sector today employs over 8,000 multinational industry professionals and contributes 10-12% of Malta’s GDP.
GLOBAL IGAMING M&A ACTIVITY
As operators face increasing regulatory, compliance and operational costs, M&A activity in the iGaming sphere is set to increase globally and across Europe. Pre-eminent industry commentators remain of the view that the European online gaming sector is set to consolidate in the near term as falling industry growth rates in Europe, rising marketing costs, increased gaming taxes and rising competition makes scale an increasing necessity to compete more effectively.
IGAMING M&A ACTIVITY IN MALTA
With the iGaming industry set for increased M&A activity, operators and practitioners involved in international M&A are beginning to pay more attention to what Malta can offer them. Indeed, data sourced from Bloomberg and Capital IQ for the period 2008-2015 reveals that the iGaming sector emerges as the foremost sector in Malta in terms of the number of Malta-based assets targeted as part of M&A transactions.
THE PROCESS – TRIALS & TRIBULATIONS
Deal makers will be quick to note that a committed project team enjoying a multidisciplinary skill set is a key ingredient to the process. Commensurate regulatory input is required to ensure early identification of regulatory issues as well as in support of both Bidder and Target’s liaison with the relevant Regulatory Authorities.
The ICT dimension should never be underestimated, as platform regulatory approvals and transitional mechanics may come into play.
Within the context of a sale of business, the preparatory stage of grooming the asset never starts early enough, particularly when businesses have enjoyed rapid growth which has placed pressure on organisational structures.
For entities bidding for Targets in cross border deals, local knowledge and support remain quintessential to provide additional speed of execution and sensitivity to local operating norms and customs.
KPMG MALTA - THE PRE-EMINENT MALTESE DEAL ADVISORY TEAM
KPMG in Malta recognises and understands the challenges and opportunities faced by gaming entities, both on the micro level and on the wider global scale. With dedicated M&A professionals and industry champions in the local office, KPMG Malta is fully integrated in the KPMG M&A global network which spans more than 160 offices in 82 member firm countries giving us access to invaluable understanding and knowledge of markets and decision makers throughout the world.
We distinguish ourselves by our integrated multi-disciplinary approach offering a start-to-close (and beyond) solution.
We leverage one of the widest transaction tool-kits. KPMG in Malta’s team assist clients to navigate through issues including regulatory, pricing, IT, tax, corporate, negotiations and due diligence – all key to a successful transaction.
We are geared to assist with a wide range of transactions, including opportunistic acquisitions, mergers, disposals, public takeovers, share-for-share deals, minority participations, joint ventures, strategic partnerships, and IPOs.
We look forward to helping you take your business to the next level of the game.
© 2019 KPMG, a Malta civil partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
KPMG International Cooperative (“KPMG International”) is a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.