In what is being viewed as a highly interesting move, Spanish online gaming Group, Codere Online has agreed to a merger deal with special purpose acquisition (SPAC) company DD3, which is listed on NASDAQ.
Codere Online is a subsidiary of the Spanish company, Codere Group, which are specialists in the online gambling industry. This latest move is one that sees Codere Online hope to become listed on the NASDAQ themselves, under their new ownership, which should see the business entity valued at $350 million.
Moshe Erdee, who is the managing director of Codere Online, will stay at the helm and indicated that this move to go public will put the business in a great position to really capitalize on the potential that the Latin American market has. This is taking into account the likes of Spain, Italy, Colombia, Mexico, and Panama, while he also stated the part that Buenos Aires; the capital of Argentina could yet well play.
Erdee indicated that he was hopeful of Codere being operational in Buenos Aires towards the end of 2021, which will represent a great platform to increase the company’s LatAm awareness.
It is quite rare in the online gambling industry, for operators to join forces with financial institutions, however, DD3 has realised the potential that Codere has to really capitalise in South America and take advantage of what could be a significantly lucrative marketplace.
As more and more legislation gets approved in South American countries for online gambling, DD3 hope that Codere can swiftly become the leader in this market and is primed to take advantage of substantial demographic changes in certain regions, which favour the presence of online gambling.
Martin Werner who heads DD3 (a former Goldman Sachs executive), indicated that a partnership with Codere is exciting and as a result, the omnichannel services that the online gambling company have can play a huge part in the company’s planned South American expansion.
The reaction to the deal among Codere chiefs is one of optimism, with CEO Vicente Di Loreto, suggesting that this move will give the business, the required access to financial resources that it needs in order for the online operation to move to the next level in its ambitious growth plans.
This deal comes at a time when the Spanish gambling firm was experiencing somewhat of a rollercoaster ride in terms of its balance sheet. Having already been placed under liquidation and under the control of its US creditors, this latest move provides light relief.
The injection of cash that is provided by DD3, will see in excess of $418 million worth of debt owed to creditors and investors, converted into equity under a financial restructuring plan, with the expected listing on the NASDAQ playing a key factor in this agreement, with this on course to be finalised by the end of the fourth quarter of 2021.
Over the last couple of years, we have seen substantial moves from South American countries to fully regulate online gambling, which has seen the number of new Latin online gambling brands increase substantially.
Arguably where the biggest potential for new companies lies, is in the region of Buenos Aires, with this still locked in negotiations to secure legitimate legislation for online gambling. Demographic shifts in the city with regards to an increase in the amount of disposable income, plus a strong interest in online gambling provides Codere with a great opportunity to really take advantage of this situation.
In addition, other Spanish speaking countries such as Mexico have also demonstrated that they are prime candidates for new online gambling brands as well.
Written for OnlineCasino-Australia.com by Martin Jones - Published on 05-07-2021