29th Mar 2007 14:40
888 Holdings plc29 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." --------------------------* Unaudited financials (ends) Contacts and enquiries 888Gigi Levy Chief Executive Officer +350 49800Aviad Kobrine Chief Financial Officer +350 49800 Bell Pottinger Corporate & Financial +44 (0)20 7861 3232Ann-marie Wilkinson/Nick Lambert/Chris Hamilton This announcement includes statements that are, or may be deemed to be, "forward-looking statements". By their nature, forward-looking statements involverisk and uncertainty since they relate to future events and circumstances.Forward-looking statements may and often do differ materially from actualresults. Any forward-looking statements in this announcement reflect 888's viewwith respect to future events as at the date of this announcement. Save asrequired by law or by the Listing Rules of the UK Listing Authority, 888undertakes no obligation publicly to release the results of any revisions to anyforward-looking statements in this announcement that may occur due to any changein its expectations or to reflect events or circumstances after the date of thisannouncement. Notes to Editors About 888 888.com is headquartered and licensed in Gibraltar with offices in the suburbsof Tel Aviv, Antigua and London. 888's customer support is available in up to 11languages - 24 hours a day, seven days a week. In October 2005, 888's shares were admitted to the Main Market of the LondonStock Exchange. 888.com offers traditional casino products such as blackjack, roulette, craps,baccarat, keno, slot machines, video, and a variety of poker games. Its mainpoker offering is provided through the Pacific Poker brand which offers ringgames and tournaments. Other offerings include skill games such as checkers, backgammon and arcadegames (888.tv) as well as free poker school and other casino games through888.info. The Group has its own R&D arm that is based in Tel Aviv and develops proprietarysoftware for exclusive use by 888.com. This enables the Group to evolvecontinually and develop the software and systems to give customers a state ofthe art gaming experience. It also provides a full back office management systemthat is owned and controlled directly by 888. This ensures the company is notreliant on third parties for its software. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
888.L