Malta’s competition regulator clears CVC’s acquisition of Gaming Labs International

The Malta Competition and Consumer Affairs Authority (MCCAA) has granted unconditional approval for the acquisition of testing and certification giant Gaming Laboratories International (GLI) by private equity firm CVC Capital Partners.

The regulatory green light, announced by the MCCAA’s Office for Competition, concludes that the proposed concentration “will not lead to a substantial lessening of competition (SLC) in the affected markets,” as the involved entities will continue to face strong competitive pressures.

The deal sees UK-based investment vehicle Avalon Buyer Limited, a newly formed entity indirectly owned and financed by CVC Funds, acquire GLI and its affiliates Worldwide Laboratories, LLC and Kobetron, LLC.

The acquisition represents a significant strategic move for CVC, one of the world’s largest private equity firms, to deepen its investment in the global gambling industry. GLI is a preeminent provider of testing, inspection, and certification (TIC) services, which are essential for gaming operators and suppliers to achieve compliance in regulated markets worldwide.

No price of the acquisition has so far been revealed.

GLI was founded in 1989 and has grown to become one of the most influential behind-the-scenes companies in the global gaming industry. As the premier independent testing authority, its standards and accreditations carry more weight than arguably any non-regulator.

The company has expanded all over the globe since its inception and currently lists 32 total offices. GLI has been influential in setting up emerging markets throughout the years, some of which have grown to become major players, in Australia, Macau, Brazil and the UAE.

In its assessment, the Office for Competition in Malta acknowledged a potential vertical relationship arising from the deal. This is due to CVC’s existing ownership of Gaming1, a portfolio company that provides both land-based and online gaming services, including B2B game licensing.

The regulator noted that Gaming1 has a limited presence in Malta, accounting for less than one per cent of its global revenue, and is primarily active in licensing online games to third-party operators on a B2B basis. The assessment concluded that even with this relationship, the transaction would not harm competition, given the multi-jurisdictional nature of the industry and the need for operators to use TIC providers with global expertise.

With the required regulatory approval from Malta now secured, the parties are closer to proceeding with closing the transaction, pending a green light from Austria’s regulatory authorities.

The deal strengthens CVC’s foothold in the gaming sector by combining GLI’s crucial compliance infrastructure with its existing investments in gaming operators.

The acquisition marks one of the latest moves in CVC’s global expansion strategy, which spans sectors from financial services to manufacturing across Europe, the US and the Asia-Pacific region.

Featured Image: GLI