31st Oct 2013 11:27
LONDON (Alliance News) - NetPlay TV PLC Thursday said it has bought Vernons.com, the e-gaming division of Sportech PLC, in a GBP3 million deal.
"The acquisition, which will be immediately earnings enhancing, fits very well with the group's core business, adds scale and customer reach, and will be integrated quickly and efficiently to realise the excellent operational synergies," NetPlay Chief Executive Charles Butler said in a statement.
Vernons.com, which operates an online casino, bingo, poker and sports books, boasts 367,000 registered users, which helped it to make a GBP1.1 million in operating profit in the 12 months to December 31, 2012, on GBP4.8 million revenue.
However, Vernons.com made a GBP700,000 operating loss on total revenue of GBP2.8 million in the first half of 2013.
Sportech said those losses have continued into the second half and that it made the decision to sell the e-gaming business after carrying out a strategic review in the last six months.
"Sportech's management has concluded that the operation is not of sufficient scale and that Sportech would need to invest further or acquire additional e-Gaming assets to derive an acceptable financial return," Sportech said in a separate statement.
Sportech said it would focus on other areas of its business, including its exclusive horseracing betting platform in Connecticut.
The GBP3 million deal will be paid in cash from NetPlay's existing cash resources and will see Sportech contribute GBP100,000 towards NetPlay's restructuring and integration costs.
NetPlay said the acquisition gives it greater product variety, and it plans to cross market its existing live roulette television product by offering it to Vernons.com's customer database after integration is completed.
NetPlay, which operates SuperCasino.com and Jackpot247.com, trades on AIM. Its shares were Thursday quoted at 18.83 pence, down 0.9%. Sportech shares, which trade on the main market, were down 2.8% at 87.00 pence.
By Samuel Agini; [email protected]; @samuelagini
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