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Intertain – the perfect acquisition target


Intertain Group (IT.TO) is the world’s largest bingo-led online gaming company. The Canada based company offers bingo-led and casino games to its customers using the InterCasino, Costa, Vera&John, Jackpotjoy and, and Botemania brands.


Interestingly, Intertain has an outspoken strategy to focus on the female demographic and to be active in regulated markets. In fact, it has among the highest percentage of online revenue from regulated markets across its peer group.

Regulated markets


Most of Intertain’s business comes from Europe but the company is listed in Canada, where the understanding and appreciation of the online gaming sector seems rather low. What is astonishing is that Intertain’s valuation is only a fraction of that of the European listed peers. In the table below we have listed several listed online gaming operators. We have used consensus estimates for 2016 from and/or company guidance where available. The difference to Intertain is striking:


As you can see, Intertain is trading at a significant discount to its peers on all multiples. Its EV/Sales multiple is 36% below peer average, its EV/EBITDA multiple is 60% below, its PE-ratio is 77% below and its Price-to-book ratio is 87% below peer average.

Operationally, things are going very well for Intertain and in its recently published full-year 2015 report the company could report year-over-year revenue growth of 20% for its Jackpotjoy brand, 29% y-o-y growth for Vera & John and 11% for Mandalay Media.


Given the fact that the vast majority of Intertain’s revenues is generated in Europe, it appears to be a no-brainer for one of the European companies to buy out Intertain and increase its value substantially over night, simply by integrating it into its own operations.

Unsurprisingly, in its recent FY 2015 report Intertain stated that “the company has received many expressions of interest in acquiring all or material parts of its business. The Special Committee will consider a broad range of alternatives, including strategic transactions providing for a sale of the company, one or more business units or partial offers and recapitalizations.

As another option, we would find it favourable for shareholders if the company was to relist on a European stock exchange. In any case, the upside from current share price levels seems very attractive.

Nordic Investor

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