GGRAsia – Sega Sammy eyes cross-sales with GAN acquisition: mgmt

Sega Sammy eyes cross-sales with GAN acquisition: mgmt

Nov 29, 2023 Newsdesk iGaming, Industry Talk, Latest News

The management of Japan’s Sega Sammy Holdings Inc says the acquisition of online gaming enterprise GAN Ltd will help create “significant synergies” with other businesses of the group, especially as the iGaming segment is expected to be legalised in more states in the U.S. market.

Sega Sammy Holdings said earlier this month that one of its units is to pay about US$107.6 million for GAN, a company that offers business-to-business software services in the United States, and business-to-consumer services in Europe and South America. The deal is expected to close by the third quarter of fiscal year ending March 2025.

The deal will be done via casino equipment maker Sega Sammy Creation Inc, which will acquire GAN via a special purpose company.

“GAN has the technology to provide business-to-business solutions for online casinos, and Sega Sammy Creation has the customer base. We’d like to grow in the business-to-business area by leveraging each other’s user pools to create a flow that enables cross-sales,” stated the management of the parent company.

The comments – attributed to Haruki Satomi, president and group chief executive of Sega Sammy Holdings; and Koichi Fukazawa, group chief financial officer (CFO) – were made at a analysts’ briefing following the firm’s results for the quarter to September 30.

The executives noted that GAN was not operating an online business targeted to consumers in North America, “where competition is fierce”. Instead, they added, GAN is “the provider of a unique tech platform” to operators in North America, with one of the “three major companies” in that market “already a significant customer”.

In a separate presentation, Mr Fukazawa highlighted the growth opportunities in the U.S. market, particularly in iGaming, as more states eye legalisation.

“We would like to think about how we can expand this, including the merge with the customer base of Sega Sammy Creation,” he stated.

“First of all, we would like aim to build a solid foundation in the North American market, which is stable, and well controlled in terms of compliance due to the strong regulation, that also has large market size,” added the CFO.