Research Update: Italian Gaming Company Gamenet Group Ratings Placed On CreditWatch Positive On Agreement To Purchase GoldBet

Gamenet Group S.p.A. (Gamenet) has agreed to acquire GoldBet Srl for €265 million. The company intends to use available cash and to issue €225 million new senior secured notes to fund the acquisition. The acquisition will provide Gamenet with a larger scale, greater product diversity, improved profitability, and more solid cash flow generation, combined with the potential for significant cost synergies. We are placing the 'B' long-term issuer credit rating on Gamenet on CreditWatch with positive implications. At the same time, we are assigning our preliminary 'B+' issue rating with a '3' recovery rating to the proposed €225 million senior secured notes. We plan to resolve the CreditWatch placement following completion of the acquisition, which we expect will take place

...+ Gamenet Group S.p.A. (Gamenet) has agreed to acquire GoldBet Srl for 265 million. The company intends to use available cash and to issue 225 million new senior secured notes to fund the acquisition. + The acquisition will provide Gamenet with a larger scale, greater product diversity, improved profitability, and more solid cash flow generation, combined with the potential for significant cost synergies. + We are placing the 'B' long-term issuer credit rating on Gamenet on CreditWatch with positive implications. At the same time, we are assigning our preliminary 'B+' issue rating with a '3' recovery rating to the proposed 225 million senior secured notes. + We plan to resolve the CreditWatch placement following completion of the acquisition, which we expect will take place in the third or fourth quarter of 2018. We would raise the long-term issuer credit rating by one notch to 'B+' if Gamenet completes the transaction under its current terms....

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