Allwyn expands its US presence with acquisition of Camelot Lottery Solutions
One of Europe’s leading multi-national lottery operators, Allwyn, announced an agreement with Ontario Teachers for the acquisition of Camelot Lottery Solutions group. The acquisition sees the Swiss operator expand its operations in the US after getting listed on the New York Stock Exchange at the beginning of this year. In the last month, the Swiss operator announced the agreement to acquire Camelot UK. That acquisition is supposed to be completed during the first quarter of 2023.
Allwyn had completed a successful listing on the New York Stock Exchange earlier this year. ©Sophie Backes/Unsplash
The Illinois Lottery is operated by the Camelot LS Group. The Chicago-based operator operates the lottery under a private management agreement through Camelot Illinois LLC. Furthermore, in an effort to bolster the lottery operations, the operator has a tie-up with Arkansas Scholarship Lottery. The group also offers products and services to numerous lotteries and players across North America and Europe. As operations across all verticals seem to be functioning smoothly, Allwyn is not looking to make any management changes at Camelot LS after the take-over is complete. The Swiss operator intends to retain the existing team and further enhance the overall performance.
Big moves in North America for Allwyn this year
After making its presence felt in Europe, Allwyn intends to replicate the same in North America. In January this year, Allwyn made its mark in the US after getting listed on the New York Stock Exchange (NYSE) in partnership with Publicly-Traded Cohn Robbins Holdings Corp. Now the beginning of an expansion comes in the form of the acquisition of Camelot LS Group.
The take-over is expected to be closed during Q1 of 2023. Once the acquisition is officially complete, all the companies and affiliates of the Camelot LS Group will be completely owned by Allwyn. The Chief Executive Officer (CEO) of Camelot LS Group, Wayne Pickup, has his sights set on combining resources and expertise with Allwyn in an effort to boost sustainable growth as well as revenue for Illinois. Adding further to the Camelot LS Group Chief’s intention, the CEO of Allwyn, Robert Chvatal, spoke about the Swiss operator’s growth on US soil.
“We have always viewed the US market as an important part of Allwyn’s future growth story, and the acquisition of Camelot LS Group, is the right step. Allwyn’s goal is building better lotteries, and helping them raise more for good causes, through innovation, technology, efficiency and safety in our quest for enhanced player engagement. Both Allwyn and Camelot share a passion about the lottery business, delivering value to our customers, and growing lottery returns to communities.”
The terms and other details of the transaction remained undisclosed, but when initial reports of the takeover broke the news, a lot of figures were reported. Allwyn have accumulated funds in the form of loans from several international banks for this takeover.
Allwyn’s collaborative loan
Just a month ago, the Swiss operator struck deals with numerous international banks and secured a loan of $1.66 billion. All loans were of different types, meaning the recovery terms and conditions for each loan were different.
Allwyn accumulated $455 million in amortizing term loans. The same amount was secured in bullet-term loans, while $310 million were tied into a revolving credit facility. The amortizing loan deal gives the operator a period of five years to repay the full loan amount. The bullet-term loans will be due in six years, but these loans will require the operator to pay most of the sum towards the end of the term rather than equal installments till 2028, making it beneficial for Allwyn. The third type will be due in 2027, in which the operator can get more loans as it keeps clearing parts of the initial loan.
After securing the $1.66 billion loan, Allwyn designated certain amounts to three specific areas that needed funds immediately. A chunk of the loan was reserved to pay off the operator’s debt that had accumulated after a syndicate deal which was agreed upon for a sum of $643 million. A part of the loan amount was set aside for damage limitation in the form of a bank guarantee if the operator failed to repay the loan according to the agreed-upon terms and conditions.
A figure of around $310 million was set aside to settle other outstanding debts. Further divisions saw a part of it finance the takeover of the lotto for its fourth cycle of licensing earlier this year. The decision was appealed by Camelot LS – the same entity that will be wholly owned by Allwyn in the next few months. However, back then, the move was not agreed upon. The appeal was made, but it was ultimately dropped.
Allwyn has already used Camelot for UK market
Allwyn is Europe’s leading lottery operator and offers its lottery services in Austria, Cyprus, the Czech Republic, Greece, and Italy. After reaching a deal to acquire Camelot UK at the beginning of this year, a subsidiary of the Swiss operator was issued the operator license for UK National Lottery that will kick in from February 2024. Until then, Camelot UK will be the licensed operator till January 31, 2024, having monopolized the industry for 28 years.
