Scientific Games old guard to buy majority share in Inspired Gaming

her significant acquisition in the provider space has been announced this week, as special purpose acquisition company Hydra Industries Acquisition Corp. is to purchase a 65% share in Inspired Gaming Group for £200m.

The transaction value includes Inspired’s debt and Macquarie Capital will part-fund the deal to the tune of £15m, in addition to Hydra’s cash in trust, approximately £60m.

The majority stake in Inspired will be bought from funds managed by Vitruvian Partners, a private equity firm which is also the former owner of provider OpenBet, sold to NYX Gaming Group for £270m in May, and Vitruvian will keep hold of the remaining 35% share in the business.

Vitruvian bought Inspired for £74.4m in 2010, though Inspired founder Luke Alvarez has remained with the company and is currently CEO.

This comes after it was revealed on Wednesday that Playtech has bought a 90% share in BGT for €138m.

One thing that is difficult to miss when looking at the deal is the link with Scientific Games.

Hydra CEO Lorne Weil is a former Chairman and CEO of Scientific Games where he worked in two spells, firstly from 1992 to 2008 and secondly from 2010 to 2013, while Hydra CFO George Peng is a former employee of Highpoint Associates, which served as a consultant to Scientific Games.

Marty Schloss, Hydra’s general counsel and secretary, served in the same position for Scientific Games for 13 years.

Weil will be Executive Chairman of Inspired following the transaction and Alvarez will continue as CEO.

The deal is expected to complete in October.

Philip Russmeyer, a Virtuvian partner, said: “We have enjoyed a strong and productive partnership with the management team at Inspired and are delighted to support this transaction, which will facilitate access to capital markets and support the company in the continued build-out of its market-leading positions."

Inspired’s product range includes B2 and B3 gaming machines in the UK, video lottery terminals, virtuals and casino table gaming.

The company’s revenue is expected to be £82.5m for its fiscal year ending in September.