Agreement On Online Poker Firm Acquisition
Published: Saturday, December 17, 2005 Online-Casinos.com
AGREEMENT REACHED ON ONGAME ONLINE POKER SOFTWARE HOUSE ACQUISITION
$570 million online poker deal has some conditions but should go through by May 2006
BET & WIN Interactive Entertainment and Ongame e-solutions AB have agreed on the acquisition of the latter for at least 474 million euros ($570 million).
BETandWIN will pay Ongame, a closely held company based in Stockholm that operates Web sites including the online poker room 'PokerRoom', in cash and stock, BETandWIN spokesman Konrad Sveceny is quoted as saying.
The Internet poker market was worth $1 billion last year, up from $90 million in 2002, according to research company Christensen Capital Advisors.
The online gaming market is "really growing,'' said Peter Till, who manages 13 million euros worth of Austrian stocks, including BETandWIN shares, at Fondsfabrik in Vienna.
"The transaction certainly wasn't cheap,'' he said. Bet and Win is a listed gambling company in Vienna, Austria. The stock has more than quintupled this year, making it one of the world's best performers among companies with market values of at least $1 billion.
The purchase is more than four times greater than any other Internet gambling takeover, according to Bloomberg data.
Ongame made an operating profit of 137 million kronor ($17 million) for 2004 on sales of 411 million kronor, according to its Web site. The company was founded in 1999 and estimates that 6 million online poker players worldwide use its technology.
"The acquisition enables us to establish BETandWIN as a one-stop, global gaming and sports-betting brand significantly earlier than either company could deliver independently,'' said Norbert Teufelberger, co-chief executive of the Austrian company.
BET and WIN will complete the purchase by May, according to its statement. The company will pay Ongame about 213 million euros in cash before the end of April and issue shares worth at least 190 million euros, equivalent to a stake of around 12 percent, according to Sveceny.
To receive the full purchase price, Ongame must report earnings before interest, taxes, depreciation and amortization for this year of at least $30 million on sales of at least $105 million, BETandWIN said.
BET and WIN was advised by Dresdner Kleinwort Wasserstein, and HSBC Holdings Plc acted for Ongame
