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Delta Corp to sell DeltaTech Gaming to Head Digital Works in ₹491 crore deal
The consolidation of RMG companies are likely to increase due to uncertain regulatory policies and 28 percent GST regime impacting the industry.
The transaction shall be done in 2 parts with an initial acquisition of 51% of DGL by HDW, followed by a merger of DGL with HDW. Upon completion of the merger, DCL will hold 5.7% stake in HDW.
Delta Corp Limited (DCL) the casino and gaming company has entered into an agreement with Head Digital Works Private Limited (HDW) for the acquisition of Deltatech Gaming Limited (DGL) which runs an Online Poker Platform under the name ‘Adda52’. The consolidation of RMG companies are likely to increase due to uncertain regulatory policies and 28 percent GST regime impacting the industry.
The Company is expected to acquire approximately 2.8% shareholding of Head Digital by 06th April, 2025 (when Head Digital acquires 51% equity share capital of DGL) and increase its shareholding approximately 5.7% shareholding of Head Digital upon completion of the proposed merger of DGL with Head Digital.
As per the disclosure to exchanges, "The Company has agreed to certain non-compete and non-solicit arrangements for a period of 5 years from the completion of Head Digital’s acquisition of 51% stake in DGL."
Delta Corp Limited informed the exchanges that Head Digital Works Private Limited runs an Online Rummy and Poker Platform under the brand ‘A23’ and the subsequent merger of DGL with HDW, for a total consideration of approximately INR 491 Crore. The transaction shall be done in 2 parts with an initial acquisition of 51% of DGL by HDW, followed by a merger of DGL with HDW. Upon completion of the merger, DCL will hold 5.7% stake in HDW.
Commenting on the development, Ashish Kapadia, Managing Director, DCL said: “We’re excited for this journey with Deepak and team, whose leadership has been instrumental in shaping the online Rummy market in India. We believe that this transaction will help Adda52’s leading position in the online poker market.”
Deepak Gullapalli, Founder and CEO of HDW, also shared his views: “HDW is the pioneer in online gaming in India and we are excited to work with one of India’s best known poker brands Adda52. Adda52 has been a leader in online poker in India and has an excellent platform and a strong user base. This transaction will help grow our poker business and help us create a leading diversified card based gaming platform in India.”
Deltatech Gaming reported total income of Rs 92.9 crore for the the financial year March 31, 2024 (FY24), contributing for about 13.8 percent of Delta Corp's FY24 revenues.
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