888 Holdings plc
29 March 2007
29 March 2007
888 Holdings Public Limited Company ('888')
Acquisition of the Online Bingo Business of Globalcom Limited
888 Holdings plc ('888'), one of the world's most popular online gaming
entertainment companies, announces today its acquisition of the online Bingo
business of Globalcom Limited (the 'Bingo Business'), a privately owned company
registered in Belize, by way of an asset acquisition for an all cash
consideration of US$32.4 million (less amounts payable to customers). 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.
The consideration comprises two elements, a base acquisition price of US$32.4
million (less amounts payable to customers) and an earn-out with an additional
deferred payment of up to US$11 million. The base consideration is broken
down as follows:
• US$10.8 million, initial consideration, payable at completion
• US$5.4 million (less amounts payable to customers) payable 90 days from
completion; and
• The balance, payable on the first anniversary of completion the acquisition
In addition to the base consideration an agreed earn-out payment may result in
further deferred cash payment to the vendor of up to US$11 million on the basis
of actual performance during financial year 2007. This payment will be
determined and made by the first anniversary of completion of the acquisition
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.'
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* Unaudited financials
(ends)
Contacts and enquiries
888
Gigi Levy Chief Executive Officer +350 49800
Aviad Kobrine Chief Financial Officer +350 49800
Bell Pottinger Corporate & Financial +44 (0)20 7861 3232
Ann-marie Wilkinson/Nick Lambert/Chris Hamilton
This announcement includes statements that are, or may be deemed to be, 'for
ward-looking statements'. By their nature, forward-looking statements involve
risk and uncertainty since they relate to future events and circumstances.
Forward-looking statements may and often do differ materially from actual
results. Any forward-looking statements in this announcement reflect 888's view
with respect to future events as at the date of this announcement. Save as
required by law or by the Listing Rules of the UK Listing Authority, 888
undertakes no obligation publicly to release the results of any revisions to any
forward-looking statements in this announcement that may occur due to any change
in its expectations or to reflect events or circumstances after the date of this
announcement.
Notes to Editors
About 888
888.com is headquartered and licensed in Gibraltar with offices in the suburbs
of Tel Aviv, Antigua and London. 888's customer support is available in up to 11
languages - 24 hours a day, seven days a week.
In October 2005, 888's shares were admitted to the Main Market of the London
Stock Exchange.
888.com offers traditional casino products such as blackjack, roulette, craps,
baccarat, keno, slot machines, video, and a variety of poker games. Its main
poker offering is provided through the Pacific Poker brand which offers ring
games and tournaments.
Other offerings include skill games such as checkers, backgammon and arcade
games (888.tv) as well as free poker school and other casino games through
888.info.
The Group has its own R&D arm that is based in Tel Aviv and develops proprietary
software for exclusive use by 888.com. This enables the Group to evolve
continually and develop the software and systems to give customers a state of
the art gaming experience. It also provides a full back office management system
that is owned and controlled directly by 888. This ensures the company is not
reliant on third parties for its software.
This information is provided by RNS
The company news service from the London Stock Exchange