New Direction For World Gaming
Published: Monday, November 14, 2005 Online-Casinos.com
NEW DIRECTION FOR WORLD GAMING WITH ACQUISITION OF SPORTSBETTING
Biggest licensee group purchased for $96 million
Reuters is reporting today on a World Gaming acquisition which Online-Casinos.com
recorded on October 28:
World Gaming sent out a signal that it was back and expanding into the operator
sector this week with the provisional acquisition of the Sportsbetting group for
up to $96 million, to be paid 75 percent in cash and 25 percent by the issue and
allotment of Consideration Shares.
The final price will depend on whether the group's profit before tax is not less
than $15 million this year. In the event that the PBT is below $15 million, the
deal will drop to six times the 2005 PBT, subject to a minimum consideration of
$72 million.
The agreement involves certain of the businesses and assets of Real Entertainment
Ltd and the entire issued share capital of DNI Holdings Ltd, together comprising
the Sportsbetting.com Group, which is currently World Gaming's largest licensee.
Sportsbetting.com Group has established a number of popular Internet-based gaming
brands since its inception in September 1999, including its flagship brand Sportsbetting.com
and other primary sites like Racebook.com and Win4real.com. The Sportsbetting.com
Group offers a full suite of sports betting, horseracing, casino, and poker products
on each of its sites as part of the gaming software which it licenses and sublicenses
from World Gaming.
The acquisition is conditional upon the World Gaming Group securing the required
debt and equity financing as well as obtaining the consent of World Gaming's shareholders
at the Annual General Meeting. The conditional purchase agreement provides that
the vendors may terminate the agreement if these conditions are not met by 14
December 2005, unless extended by mutual agreement.
The transaction constitutes a reverse takeover for the purpose of the London exchange
AIM rules and hence in accordance with these rules World Gaming has requested
that its shares be suspended from trading on AIM until the AGM.
In the event that the conditions upon which the transaction is conditional are
not met by 14 December 2005 World Gaming will be liable to pay Sportsbetting's
costs in relation to the transaction not exceeding GBP 500 000.
World Gaming reports that, now that CEO Daniel Moran and his team has stabilised
World Gaming and achieved profitability once again for the group, it is time to
focus on leveraging key assets including the gaming software itself, the intellectual
property and the associated infrastructure. Each of these establishes a strong
platform to achieving the objective of moving up the industry value chain by taking
ownership of the underlying customer database. This will allow the World Gaming
Group to earn all of the revenue, or net win, on each gambling transaction as
opposed to a percentage of revenue under existing licensing models.
Commenting on the proposed acquisition, Daniel Moran, Chief Executive of World
Gaming, said:
"The acquisition represents the World Gaming Group's first step into Internet
gaming operations in its core markets of sports betting, horse racing, casino
and poker. Our existing business and assets combined with those of the Sportsbetting.com
Group represent a robust platform from which we can continue with our strategy
to grow and become a leading consolidator in the industry. We believe that this
transaction better positions the Group to target global markets which will increase
revenues and diversify risk".
