Acquisitions involving gaming companies registered in Malta : an analysis

Abstract

PURPOSE: This study analyses the acquisition process and the motives behind the increase in acquisition deals in the gaming industry. The critical success factors as well as the risks and challenges faced in these deals are also examined. DESIGN: Eleven semi-structured interviews were conducted with advisors from big four accounting firms as well as representatives from gaming companies. FINDINGS: This study established that gaming companies registered in Malta do follow the acquisition process however some of the stages were carried out differently. Some gaming companies adopted acquisition deals as part of their business strategy and had in-house teams responsible for due diligence and integration stages. Other companies viewed these deals as an opportunity and only undertook acquisitions when the opportunity arose. This study showed that the significant increase in acquisition deals in the gaming industry was mainly because of the increase in gaming regulation. This has led companies to achieve lower margins and as a result, small companies were acquired by larger companies. Findings also highlighted the importance of the due diligence process and how carrying out this process properly leads to a better chance of executing a successful deal. Finally, the risks and challenges that were faced by gaming companies were also identified. CONCLUSIONS: Although there were a number of similarities in the acquisition process, some companies carried out some stages differently. This depended on what the acquiring company wanted to achieve from the acquisition deal. The increase in gaming regulation in a number of markets, has resulted in big companies dominating the industry and acquiring start-ups. Moreover, the study showed that acquisitions will most likely continue to increase in the future. IMPLICATIONS/VALUE: This study highlights the recent increase in acquisition deals in the gaming industry. The study will be useful to acquiring gaming companies when undertaking the acquisition process and highlighting what needs to be done in order to ensure a successful deal.