PacificNet's Newest Acquisition
Published: Saturday, December 08, 2007 Online-Casinos.com
PACIFIC NET'S NEW ACQUISITION IS A GAMES DEVELOPER
Octavian International joins the growing PN stable - focus is on high margin gaming technology
Online gaming technology provider PacificNet, Inc. just keeps on growing, it appears, with the announcement this week that the Asian group has signed a definitive agreement to acquire 100 percent ownership of Octavian International Limited, a worldwide supplier of gaming technology, solutions and systems.
The transaction is subject to various conditions, including the completion of due diligence, which has already commenced. PacificNet will issue restricted shares of PACT representing approximately 19.5 percent of PacificNet's outstanding shares. There is also an additional cash performance bonus.
According to Octavian's financial reports as audited by Grant Thornton UK LLP under UK GAAP, Octavian had a revenue of approximately $64.6 million, gross profit of approx $18.4 million, EBITDA of approx $6.2 million USD, and pre-tax profit of $5.5 million, for fiscal year ending Dec 31, 2006.
This acquisition is expected to increase PacificNet's overall gaming revenues and profits. Upon completion, Octavian will continue operating under its current name as a wholly-owned subsidiary of PacificNet and will continue to pursue its global growth strategy as a leading provider of gaming technology.
Octavian CEO Harmen Brenninkmeijer will join the board of Pacific Net as an executive director of PacificNet whilst continuing to head up the Octavian subsidiary within PacificNet's gaming division. Upon completion of the earn-out provisions and profit targets as defined in the acquisition agreement, Brenninkmeijer will become President of PacificNet's Global Gaming Division.
The acquisition is expected to close in the first quarter of 2008. Sterne Agee has been appointed as the financial advisor for Octavian for this transaction.
Established in 2001, Octavian has its headquarters in Guildford, United Kingdom and develops and markets innovative games and systems used in over 30 countries including Russia, Italy, Germany, Ukraine, Colombia, Bolivia, Mexico, Argentina and South Africa.
It also distributes gaming machines and equipment from many of the world's leading gaming brands through its OctaSupplies division. The company's own games and systems including the DreamGames portfolio of casino video slot games, AWP games, downloadable/VLT games and systems for gaming and lottery operations, and ACP (Accounting, Control, Progressives) slot management systems. Octavian is one of the largest independent suppliers of back-end systems to casinos.
Commenting on the deal, Tony Tong, CEO of PacificNet, said: "We are very excited at the prospect of adding Octavian's global gaming brand name and distribution channels to PacificNet's gaming strategy. The acquisition fits well within our key focus of garnering long-term, high-margin, recurring revenue contracts in emerging gaming markets worldwide and will have a synergistic effect by combining Octavian's strong global brand name and worldwide gaming distribution expertise with PacificNet's low-cost development resources in China and local Asian gaming expertise. We are confident that Octavian's product portfolio and global growth strategy is an extremely good fit with PacificNet's."
Octavian's Brenninkmeijer added: "We project major growth worldwide in gaming systems because of the potential for the technology's flexibility in creating multiple gaming configurations including downloadable games and more engaging and customer-friendly games. As part of PacificNet, and working closely with PacificNet and its subsidiaries, Octavian would be extremely well placed for strong growth in existing and new markets. In addition, Octavian would add market-leading technology, software and experience in the rapidly- expanding lottery market to the PacificNet portfolio."
"We are very excited about working with Octavian," said Victor Tong, President of PacificNet. "Octavian's experienced creative development teams are able to create proven games that are tailored to individual jurisdictions and are highly cost-effective."
Activities at Octavian encompass both software development (OctaSystems and OctaGames) and gaming equipment distribution (OctaSupplies).
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