14th Feb 2006 18:15
PartyGaming Plc14 February 2006 14 February 2006 PartyGaming Plc ("PartyGaming" or the "Company" and, together with its subsidiaries, the "Group") Acquisition of certain businesses and assets from Empire Online Limited Highlights O Acquisition of the EmpirePoker.com skin O Further consolidates the Group's strong market position in online gaming O Concludes skin strategy ahead of launch of fully-integrated platform O Withdrawal of all legal claims by Empire Online Limited O Total cash consideration of $250 million payable on completion O Expected to be earnings enhancing in the current financial year1 PartyGaming, the world's leading online gaming company, announces today that ithas reached agreement with Empire Online Limited ("EOL") to acquire theEmpirePoker.com skin ("EmpirePoker") and other associated white label andaffiliate agreements relating to AceClub.com and StarluckCasino.com, togetherwith the withdrawal of all legal claims by EOL against the Group, for a totalcash consideration of $250 million. The agreement is conditional upon theapproval of EOL shareholders and PartyGaming has received irrevocable powers ofattorney from EOL shareholders to the effect that their votes will be cast infavour of the necessary resolution in respect of a total of 163,999,358 EOLordinary shares, representing approximately 56 per cent. of the issued sharecapital of EOL. PartyGaming has agreed to acquire the business, assets, player databases andintellectual property relating to EmpirePoker and AceClub.com, including theEmpirePoker brand and the EmpirePoker website. In the year ended 31 December2005, the gross profit before administrative expenses attributable to the assetsbeing acquired was approximately $38.7 million, although following the launch byPartyGaming of the new operating platform on 8 October 2005, the profitabilityof EmpirePoker declined materially. In the quarter ended 31 December 2005 thegross profit before administrative expenses attributable to the assets beingacquired was approximately $5.0 million. The balance sheet value of the netassets was less than $0.1 million as at 31 December 2005. In the 90 day periodto 31 January 2006, EmpirePoker had 69,402 active poker players. Thetransaction is expected to be earnings enhancing in the current financial year1. In advance of the completion of the 2005 audit, PartyGaming has made apreliminary assessment of the fair value of the consideration relating to thebusiness and assets to be acquired and to the settlement of the outstandingclaims brought against the Group by EOL. Accordingly, under InternationalFinancial Reporting Standards, PartyGaming expects to incur a non-recurringcharge in the region of $150 million in the year ended 31 December 2005 inrespect of amounts attributed to the settlement of disputes arising from theseparation of PartyPoker players from EmpirePoker and all of the other thirdparty skins in October 2005. Richard Segal, Chief Executive of PartyGaming, said today: "This acquisition brings our skins strategy to a close and consolidates ourleading position in online poker ahead of the launch of the fully-integrated,Party-branded platform. The introduction of Blackjack last October marked thebeginning of our cross-selling strategy; the integrated platform will enablePartyGaming to take the cross-selling of games to a new level." The Group's preliminary announcement of results for the year ended 31 December2005 will be made on 28 February 2006. (1) This statement should not be interpreted as a profit forecast nor to meanthat PartyGaming's future earnings per share will necessarily be greater than orequal to its historical earnings per share Contacts PartyGaming Plc +44 (0)20 7337 0100Peter Reynolds, Director of Investor RelationsJohn Shepherd, Director of Corporate Communications Financial Dynamics +44 (0)20 7831 3113Edward Bridges / Juliet Clarke This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
BPTY.LLivermore