888 Enters Online Bingo Market with Strategic Acquisition
29 March 2007
Image888 Holdings plc has acquired the online Bingo business of Globalcom Limited, a privately owned company registered in Belize, by way of an asset acquisition for an all cash consideration of US$32.4 million.
888 will deduct any amounts payable to customers from the acquisition price, but a further earn-out payment of up to US$11 million may be payable in cash 12 months from completion, on the basis of actual performance during financial year 2007. The acquisition is expected to be earnings enhancing for 888 in the current financial year.
The Bingo business operates its own leading network of 45 online bingo sites or 'skins' including Bingoballroom.com, UK-Bingo.net, Bingofabulous.com and Twofatladies.com. In addition it provides bingo solutions to business partners operating their own networks and other third party sites. These include some of the most prominent in the UK such as thinkbingo.com, thinkbingoplus.com and bingoscotland.com as well as mirrorbingo.com and foxybingo.com which are operated and owned respectively by Cashcade Ltd.
In 2006, the Bingo business generated turnover of US$11.3 million, net of bonuses granted to customers, and net profit of US$5.6 million with the majority of customers from the UK. The Bingo Business, which operates under a licence from Kahnawake, Canada, does not accept customers based in the US.
In addition to cross-selling opportunities and expansion of its product offering the acquisition extends 888's capabilities as a provider of gaming entertainment solutions to its business partners.
Commenting on the acquisition, Gigi Levy, Chief Executive Officer of 888, said: "The acquisition of the Bingo Business is an important step forward in delivering our strategy of diversifying our product offering and meeting our customer's needs. The Bingo Business is a well established market leader, highly cash generative and profitable business with proven scalable proprietary software. Bingo will be a valuable addition to our entertainment services, which we expect to provide excellent cross-selling opportunities for our expanding base of customers worldwide."
Shares of 888 Holdings Plc (LSE:888) were up a fraction today on the news at 120.50 pence. |
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