BMM acquired by Visualize Group for undisclosed sum

Industry Leader BMM Testlabs Acquired by Visualize Group: A Strategic Move for the Future of Regulated Gambling

On April 15th, BMM Testlabs, a prominent figure in the gambling compliance and testing sector, announced its acquisition by The Visualize Group, a New York-based private equity firm. The specifics of the financial agreement remain undisclosed; however, this acquisition marks a significant milestone in the evolution of regulated gaming.

BMM operates across three primary divisions: its core testing division, a dedicated cybersecurity unit, and the RG24seven Virtual Training division focused on responsible gaming. Notably, the RG24seven training division has been excluded from this transaction, as confirmed in communications with iGB.

Martin Storm, BMM’s President and CEO, will continue to lead the organization post-acquisition while retaining a substantial equity stake in the enterprise. The Visualize Group expressed enthusiasm about collaborating with Storm and the existing BMM team, signaling a commitment to enhancing BMM’s industry footprint.

This acquisition is seen as a strategic investment aimed at fostering the growth of regulated gambling worldwide. Regulatory authorities collectively depend on third-party testing laboratories to validate and certify gaming products for compliance. Established in 1981, BMM boasts a robust global presence with 16 offices and over 700 licenses, positioning it as a leader in testing alongside notable competitors like Gaming Laboratories International.

“Our team has closely examined the swift global expansion of regulated gaming markets, and we are confident this trajectory will persist,” stated CC Melvin Ike, Managing Partner at Visualize. “As new jurisdictions continue to emerge globally, the demand for safe, compliant gaming experiences intensifies. With its expansive footprint, technical leadership, and trusted market reputation, we believe BMM is poised to leverage this market opportunity effectively,” he added.

Storm remarked, “It is a privilege to partake in this initiative and witness the realization of our ambitious objectives.”

Private Equity’s Growing Interest in the Gaming Sector

Since the onset of 2024, the gaming sector has witnessed a notable surge in acquisition activities by private equity firms, encompassing a wide array of entities from suppliers to operators, extending into the testing domain. Last July alone, Apollo Global Management acquired both IGT and Everi Holdings for a staggering $6.3 billion (£4.76 billion/€5.5 billion). Prior to that, Brightstar Capital took supplier AGS private in a $1.1 billion transaction. Additionally, hedge fund Standard General’s acquisition of casino operator Bally’s Corp for $4.6 billion further highlighted this trend.

Gaming company valuations have recently faced challenges, with many trading significantly below their 52-week and historical highs, exacerbated by market shifts due to US-imposed tariffs. As a result, private equity firms have been strategically leveraging these lower valuations, seizing opportunities that other gaming entities may struggle to capitalize on.

“The challenge is that other gaming companies lack the financial clout to exploit these low valuations effectively,” commented Rick Arpin, US Gaming Leader at KPMG. “Private equity firms, with their capital resources, can act swiftly. Many gaming companies would need to incur debt, which is costly and burdensome, especially when their stock is underperforming. This situation has created an advantageous landscape for private equity as a primary acquisition source within the sector,” he elaborated.

Visualize to Introduce Broad-Based Employee Ownership Program

Navigating the strict regulations of the gaming industry poses significant challenges for mergers and acquisitions. However, with BMM’s extensive licenses and Martin Storm at the helm, The Visualize Group’s acquisition of BMM is strategically sound, requiring minimal operational adjustments. Furthermore, Visualize appears committed to investing in BMM’s workforce.

“As part of this transaction, Visualize will initiate a broad-based employee ownership program, allowing BMM’s employees to actively participate in Visualize’s value creation strategy. This initiative encompasses several pre-identified organic and inorganic growth strategies,” the announcement indicated.

BMM currently employs over 600 individuals, although details regarding the staff size of the RG24seven division, which will not be part of this deal, remain unclear.

This acquisition is a testament to the ongoing evolution and growth potential within the regulated gambling landscape, reflecting the increasing interest of private equity in optimizing operational efficiencies and expanding the reach of established brands like BMM Testlabs.