elta Corp has proposed to pay a total of 155 crore rupees (around $22 million) to acquire Gaussian Networks. The deal will be broken up into an initial payment of 47.30 crores rupees in cash for a total of 26 percent of shares and the remaining amount will be paid in the form of Redeemable Preference Shares (RPS) and Optionally Convertible Preference Shares (OCPS).
The deal is subjected to be finalized towards the end of June 2017, subject to all regulatory and statutory approval being obtained from relevant stock-exchanges, shareholders and the courts. Delta Corp is being advised by specialist law firm AZB & Partners while the legal counsel for Gaussian Networks is Khaitan & Co. and Gaggar & Associates.
Gaussian Networks was founded by Anuj Gupta and consists of a number of online websites such as Adda52.com, adda52mart.com and adda52rummy.com offering the Indian market a variety of online games such as poker, rummy, scrabble, chess, pool and golf. Adda52.com is the most popular of these online websites and has a player database of more than 100,000 making it the largest online poker website in India.
Delta Corp has so far specialized in offshore and onshore casinos holding three out of the six offshore casino licenses in Goa and operating a casino in Daman.
The company has now decided to get into the online gambling Industry in India as it sees enormous market potential in this space
A number of states such as Maharashtra, Kerala and Hyderabad and currently discussing possibilities of legalizing online gambling in their respective states as state government’s realize they could be bringing significant amount of revenue in gaming taxes.
There are many who believe that the online gambling industry could eat into the profits of the brick & mortar casino industry but Hardik Dhebar, Group CFO of Delta Corp said that the company did not share these concerns.
In a statement, Dhebar said “If you look at the worldwide market both the online as well as the onshore businesses have co-existed and both have grown whether it is Macau, whether it is Vegas, whether it is America, or South East Asia. So yes, the online space will grow, I am not denying that but I don’t think it cannibalizes or it will grow at the cost of the offline. I think the market is big enough for both to co-exist and grow at equal space.”
Delta Corp released a statement saying that this acquisition will strengthen the company’s footprint in India by expanding its range of services and will enhance its reputation of being the leader in the Indian gaming industry.