The Competition Commission has approved UK-based Avalon's plan to acquire several American companies that operate in the local gaming space, providing services to the global regulated gaming industry, including regulators, suppliers and operators.
The deal was approved without any conditions. Avalon's purchase price for Gaming Laboratories International (GLI), Worldwide Laboratories and Kobetron – all US-based gaming service providers – was not disclosed.
A merger must be reported to the Competition Commission if the companies involved reach certain revenue or asset levels. In this case, the target companies had combined local turnover/assets of more than R600 million, says spokesperson Siyabulela Makunga.
He adds that this applies even if they have only a small office, or a few employees in South Africa.
The companies Avalon is acquiring provide testing, inspection and certification services to the global regulated gaming industry, including land-based and online gaming testing, the commission explained.
Other services among the companies being bought include cyber security, R&D, training, responsible gaming support and regulatory advisory services.
“The commission concluded that the acquisition is unlikely to reduce competition or raise major public interest concerns,” it said.
Avalon was recently formed in the UK and is indirectly owned by funds managed by affiliates of CVC Capital Partners, which is listed on the Euronext Amsterdam Stock Exchange.
CVC funds invest in companies across industries, such as financial services, chemicals, utilities, manufacturing, retail and distribution in Europe, the US and Asia-Pacific. Some portfolio companies also operate in domestic markets.
The three companies being acquired each add complementary capabilities to Avalon's portfolio.
Kobetron has been around since 1984, and aims to develop and manufacture “the most sophisticated, reliable, standalone or PC-based testing equipment,” according to its website. All of its products are made and manufactured in the US. Locally, it provides signature numbers for chips used in slot machines.
GLI, created in 1989, certifies land-based, online and lottery device and system items for more than 710 jurisdictions. It says on its website that it has created a series of global standards that help suppliers, regulators and operators.
The company expanded into Africa in 1996, when it opened its third international lab in Pretoria, in conjunction with its then joint-venture partner, the South African Bureau of Standards, followed by a lab in Midrand.
Devon Dalbock, GLI Africa vice-president of government and regulatory affairs, said in 2020 that the entity was “the first gaming test lab to set up in South Africa with just a handful of employees in 1996”.
The company has since grown significantly, expanding its local staff by 58 employees in 2021 and establishing a team of math analysts to keep up with customer demand. By 2022, it had 100 employees, also providing penetration testing services to local gambling outlets.
There is limited public information on Worldwide Laboratories, the third company in the acquisition, although Bloomberg indicates it is headquartered in the United States and provides management consulting services.
Share