Dublin-listed GAN weighs up potential sale as losses mount

GAN, the online gaming software company formerly known as GameAccountNetwork, is undertaking a wide-ranging strategic review that could result in a sale of the business.

The Dermot Smurfit jnr-led company said other options it is considering include a US listing or the selling of a minority share in the business to a strategic investor.

GAN, which has appointed Union Gaming as its financial adviser to assist with the review, stressed it is not currently in discussions with any third parties about a potential sale of the business.

The review comes as the company reported its latest results which show that pretax losses rose to £6.7 million (€7.8 million) last year from £4.2 million (€4.8 million).

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Founded in 2002, GAN is a developer and supplier of enterprise-level B2B internet gaming software, services and online gaming content in the US.

GAN said its strategic review would seek to “properly recognise both the value and the scarcity of its US-facing assets”.

These include gaming licences, intellectual property patents, operational services, clients, and “significant operational know-how”.

The Dublin and London-listed software company said gross income rose 20 per cent last year to £49.2 million (€56 million) from £41.1 million (€47 million) as net revenue increased by 16 per cent to £10.6 million (€12 million) from £9.1 million (€10 million).

“2018 was a milestone period for GAN as we continued to adapt to positive changes in our online gaming market and as a result feel that the company is well positioned for the coming year,” said Mr Smurfit.

The company had net assets of £9.4 million (€10.8 million) at the year-end, with cash and cash equivalents totalling £5.5 million (€6.3 million).

“The repeal of a 25 year-old federal ban on sports betting in America in May 2018 cleared the path for GAN to launch internet sports betting just four months later following a complex re-allocation of our internal engineering resources in order to integrate the first sports betting application into our enterprise software platform,” Mr Smurfit said.

“As a direct consequence of our short-term investment cycle undertaken and completed principally in the second half of 2018, GAN’s performance to date in 2019 is exceeding our expectations,” said Mr Smurfit.

GAN last year raised £7.5 million (€8.6 million) and repaid a £2 million (€2.3 million) convertible loan to become debt-free.

“We remain confident in our prospects for 2019 and beyond. For 2019, we forecast material growth of internet sports betting, simulated gaming and real money internet gaming undertaken for US clients in New Jersey, Pennsylvania and Europe’s diverse regulated markets principally.

“Our US patent licensing programme which commenced in 2017 will also represent a new source of patent licensing revenues for GAN in 2019 and beyond,” he added.

Shares in the company were down 5.5 per cent in midday trading in London.