BMM Testlabs acquired by private equity firm Visualize Group
Financial terms of the deal were not disclosed in the announcement. There are three divisions under the BMM umbrella: the main testing division, a cybersecurity division and an RG training division. Only the latter, RG24seven Virtual Training, is not included in the acquisition, the company confirmed to iGB.
BMM President and CEO Martin Storm will stay in the role through the merger. He will also “retain a significant stake” in the business and Visualize is “thrilled to collaborate with Storm and the entire team at BMM”, per the announcement.
The acquisition is in some ways an investment in the continued growth of regulated gambling. Most regulatory bodies rely on third-party labs to help test and certify gaming products. Established in 1981, BMM has 16 offices around the world, with more than 700 licences. It is considered a global leader in testing, alongside Gaming Laboratories International.
“Our team has closely studied the rapid global expansion of regulated gaming markets, and we believe this trajectory will continue,” C.C. Melvin Ike, managing partner of Visualize, said in a statement. “As new jurisdictions open around the world, the need for safe and compliant gaming continues to rise. With its global footprint, track record of technical leadership, and trusted reputation in the market, we believe BMM is the best-positioned regulatory technology platform to capitalise on the market opportunity.”
Storm added that it is “a privilege to contribute to this journey and witness the achievement of our ambitious goals”.
Gaming increasingly attractive to private equity
Since the beginning of 2024, there has been an uptick in gaming deals from private equity. These deals have extended from suppliers to operators and now into the testing space.
Last July, Apollo Global Management swooped up both IGT and Everi Holdings for $6.3 billion (£4.76 billion/€5.5 billion). Two months prior to that, Brightstar Capital took supplier AGS private for $1.1 billion. Also in July, casino operator Bally’s Corp. was bought out by hedge fund Standard General in a deal worth $4.6 billion.
Valuations among gaming companies have been depressed for some time, with many trading well below their 52-week and all-time highs. Recent market swings tied to U.S.-imposed tariffs have not helped matters. As such, private equity firms have pounced on those low valuations when fellow gamers have not been able to.
“The problem is, other [gaming] companies can’t take advantage of [low valuations] like private equity can,” Rick Arpin, US gaming leader at KPMG, told iGB last year. “They don’t have the capital resources. They’d have to go borrow, and borrowing’s expensive. Their equity’s not trading well either. So it’s opened up the field for private equity to be one of the primary sources of acquirers in the space.”
Visualize to implement ‘broad-based employee ownership’
As a heavily regulated industry, gaming has steep barriers to entry that can be preventative to M&A. But with licences in every jurisdiction and an established leader in Storm, Visualize will likely not need to do much heavy lifting in acquiring BMM. The firm also appears to be investing heavily in BMM’s existing staff.
“As part of the transaction, Visualize will implement a broad-based employee ownership program to allow BMM’s employees the opportunity to participate in Visualize’s value creation plan for BMM, which includes several pre-identified organic and inorganic growth initiatives,” the announcement said.
As a whole, BMM has more than 600 employees, but it is unclear how many are under the RG24seven division that was not acquired.