Stars Group Looking To Raise $2.5bn For Mergers & Acquisitions

Stars Group Inc., the company that owns online poker giant PokerStars announced during a third quarter call that the company planned on raising up to $2.5 billion to fund future merger and acquisition ventures and was confident that it would be able to raise these funds.

The Stars Group also reported a strong third quarter confirming a 21.7 percent increase in year-over-year revenue, a 505.9 percent boost in net earnings, and a reduced debt by $515 million in the last one year.

The Stars Group also released a report which showed that the company has about $255 million of cash, which gives it enough monetary leverage to venture into international mergers and acquisitions.

CEO Rafael Ashkenazi said that the group is already in talks with potential partners, and are looking to grow by purchasing one big company or three to five small-to-medium companies. He did not reveal any potential names but there have been rumours that UK bookmaker William Hill could be one of the companies that will be on the radar of the Stars Group.

Back in 201, when the Stars Group was known as Amaya Inc. it entered into acquisition talks with William Hill. The merger would have created a £5-billion bookmaker that would be able to operate in several continents all over the globe. By October 2016, the two companies announced that they were abandoning potential merger talks due to opposition from William Hill’s biggest investor, Parvus Asset Management. One of the main contentions from Parvus was Amaya’s $3.5 billion debt, which would have further burdened William Hill’s struggling profitability.

In May 2017, Amaya rebranded to The Stars Group after a management reshuffle that named Ashkenazi as its chief executive officer. Ashkenazi took the reins after the company founder David Baazov stepped down due to insider trading charges.

When Ashkenazi started his term, three of his major goals for the rebranded Stars Group were to decrease its outstanding debt, diversify beyond poker and focus on mergers and acquisitions. As of date, the company has succeeded in paying off most of its debts, and has continued to strengthen its online casino and sports book offerings. Now, the company is looking to accomplish its third biggest objective.

In a statement, Ashkenazi said,

To build upon these achievements, we plan to focus on reinvesting in our core products and increasing our investment in marketing for the remainder of 2017 and into 2018 while continuing to explore further growth opportunities

Adrian Sterne

More articles by Adrian Sterne