How far away is NYX from the top, following OpenBet acquisition completion?

Now that NYX Gaming Group’s deal to acquire fellow provider OpenBet for £270m (funding of £100m was provided from William Hill and Sky Bet) has been completed, we decided to take a look at its current position in the market and how far away it may be from toppling the elite.

Market cap
When looking at the market cap of some of the industry’s leading providers, you can see that NYX still has some catching up to do. This also shows you why perhaps NYX deemed some M & A activity to be necessary. Here is how NYX stacks up against some of its competitors, according to Yahoo Finance, when converting all currencies into pounds. This is based on how NYX compares to some publically-owned providers only. The number provided in brackets shows, if applicable, the company’s position in the GBGC 50 Index January 2016, which shows the top 50 gaming companies, in terms of market cap, and is put together by Global Betting and Gaming Consultants.

Aristocrat Leisure - £3.91bn (15)
Playtech - £2.71bn (18)
IGT - £2.37bn (19)
NetEnt - £1.73bn (25)
Scientific Games - £494.9m (42)
NYX Gaming Group - £68.75m

It is slightly difficult to get a read on the direct impact that OpenBet could have on the enlarged group, given that NYX has bought a private business that does not release financial statements. However, if you were to take the OpenBet acquisition price and place it on top of NYX’s current market cap, this would give a new market cap total of £338.75m.

Revenue
In terms of revenue, it’s a fairly similar story. Here is a list of the revenue produced by the same companies in each of their last annual reporting periods, again converting the numbers into pounds. Note that the IGT revenue is on a pro forma basis as opposed to a reported basis. NYX expects revenue to exceed CAD$207m (£108.7m) for 2016.

IGT - £3.52bn
Scientific Games - £1.91bn
Aristocrat Leisure - £788.3m
Playtech - £488.04m
NetEnt - £90m
NYX Gaming Group - £27.5m

Other financial indicator
A highlight of NYX’s full year 2015 financial report was an increased net loss of 20% to CAD$8.4m.

NYX CEO Matt Davey told Gambling Insider after the releasing of NYX’s full year 2015 results that two businesses they acquired were somewhat loss making and that Ongame, the poker network it bought from Amaya in November 2014, was losing CAD$2m a month when it was purchased and is now losing just under CAD$1m a month. The negative EBITDA impact from Ongame was CAD$3m for Q4 2015. Now that Ongame is to be sold to an undisclosed buyer, referred to only as an “experienced operator”, NYX’s future could be even brighter.

What will OpenBet bring to the table?
The OpenBet deal will take NYX into a new vertical, as it has not previously been known for providing sports-betting content. This year could be time to capitalise on some troubles for Playtech, as it mentioned in its full year 2015 financial report that its sports-betting revenues were likely to fall for 2016, due to losing three sports-betting contracts through Mobenga, a Playtech subsidiary. Playtech’s sports revenue for 2015 was up 22% to €32.2m.

Looking forward
Davey feels that NYX is among the top three or four online gaming suppliers and the top 10 land-based manufacturers. The chief also feels that NYX will grow at a faster rate than its competition.

Now that the paperwork and formalities are out of the way, it is over to NYX to potentially reshape the market as we now see it.