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Zynga Loses Battle to Acquire Ongame Network


Zynga, the makers of Farmville have been outbid in their pursuit for acquiring the OnGame Network from parent company Bwin.party. The Amaya Gaming company has won what essentially amounted to a bidding war to acquire OnGame Network from the Bwin.party company. This past summer, many thought that Zynga seemed to have the lead to acquire OnGame Network, but a deal has indeed been finalized between Bwin.party and Amaya Gaming. The companies involved seem to all do well in this deal, as Bwin.party will profit significantly from the sale, and Amaya Gaming is solidifying  its strength in the online gaming providing business.

Ultimately, the sale amounts to $32.2 million that will be acquired by Bwin.party. However, this amount is not all to be paid up front, and to some extent it is not even entirely guaranteed. Amaya Gaming will be paying $19.3 million before the end of 2012. But, the remaining $12.9 million is to be paid only if and when the United States regulates online poker at some point in the next five years. This makes the deal extremely strategic for Amaya Gaming, as the company will only be able to enjoy the full potential benefit of the acquisition of OnGame Network should online gambling become legal and easy in the United States, which makes up an enormous portion of the potential client market.

The positive boost that OnGame Network provides to Amaya Gaming, with or without the addition of a regulated U.S. poker industry, is clear to see. Ongame Network already includes 25 different online poker brands, and is recognized as an extremely stable, secure, and well organized network. As noted by David Baazov, CEO of Amaya Gaming, “this makes the network very suitable to being incorporated into quick expansion into newly regulated markets.” It seems that there are many reasons for those at Amaya Gaming to be very excited, as they have essentially increased their capacity for expansion significantly.

However, while Amaya will be grabbing most of the headlines that come about due to this deal, the benefit to Bwin.party should not be forgotten. This is a company at the height of its power successfully organizing a massive sale while simultaneously enjoying enormous success with its existing products. For example. http://www.partycasino.com/ won its latest award as Casino of the Month this past September – just the latest indication that the products and platforms of Bwin.party are continuing to perform at a world class level. While the sale of the OnGame Network may be more significant for Amaya, and will change Amaya significantly, the bottom line is that this was a major victory for both parties.

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Sanity
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