Late Sunday, Aussie gaming machine Aristocrat Technologies announced it’s purchasing competition Playtech in a $3.71 one million million transaction. That values the place at a 58 percent insurance premium to where it closed last-place Friday. At to the lowest degree I psychoanalyst believes the sell highlights possible chance with gaming engineering provider GAN Ltd. (NASDAQ:GAN).
B. Riley psychoanalyst Saint David Bain says the insurance premium Aristocrat is paying to acquire Playtech, which has a similar byplay poser to GAN, could be indicative of valuation opportunity with GAN.
We believe the trade farther demonstrates scarcity value of both business-to-business (B2B) engineering and content, highlighting valuation of GAN and a handful of other B2B/business-to-consumer (B2C) gaming technology and cognitive content suppliers inwards the space, which continues to control exceedingly heavy M&A (mergers and acquisitions) activity,” said Bain inward a mention to clients today.
The analyst rates GAN “buy” with a $26 damage target, implying upside of 71 percent from the Oct. 15 close.
GAN Has Scarce Assets
Shares of GAN, which, ilk Playtech, makes gaming-related computer software that propels iGaming and sports wagering platforms, are sour 25 percent year-to-date. But the company’s technological capabilities remain alluring.
That’s even out to a greater extent straight at a clip when a great deal of the integration inwards the online gaming manufacture is revolving around buyers getting their hands on engineering to fortify their in-house tech stacks. That’s exactly what Aristocrat is doing in getting Playtech. The UK-based butt makes software system for cyberspace casinos, web-based stove poker rooms, and online sports wagering, and provides software package for fixed-odds colonnade games and online games.
While GAN isn’t yet generating bombilate as a possible takeover target, it’s enlighten some buyers are pursuing targets for technology assets. There’s conjecture that it’s tech DraftKings (NASDAQ:DKNG) wants inwards its overtures toward Entain Plc (OTC:GMVHY). As another example, Bally’s (NYSE:BALY) recent purchases of Gamesys and Bet.Works confirm gaming operators are keen on vertical desegregation and need to land tech in-house to actualise cost efficiencies.
As for GAN, its marketplace capitalization of around $640 jillion makes it easy digestible for any keep down of suitors. But the Irish troupe hasn’t been directly tied to takeover rumors.
Another Reason to Like GAN
There are no more guarantees that a suitor will come up calling for GAN, but B. Riley’s Bain says thither are other reasons to consider the shares, including a of late announced business deal with Red John Rock Resorts (NASDAQ:RRR) the investiture biotic community may follow overlooking.
Last week, GAN said it inked an grant with the gambling casino operator “to build and deploy the infrastructure for Station’s ‘STN Sports’ online sports platform, nomadic applications, and retail Over-the-Counter and Kiosk-based sports betting throughout Nevada.”
“We trust the arrangement validates elements of GAN’s Coolbet technology, which testament be incorporated into the multiple elements of the deal. Given the RRR arrangement was announced late in the daylight (Friday), and not discussed on its Analyst Day call, we trust it may hold been unmarked past investors,” said Bain.
The analyst raises 2022 and 2023 sales estimates on GAN to $176.2 jillion and $225.3 million, respectively, from $159.2 gazillion and $187.3 million.