The Austrian bookmaker has entered into a Share Purchase Agreement for the acquisition of 100% of Ongame e-solutions AB, owner of PokerRoom.com and operator of one of the world\’s fastest growing poker networks.
Completion of the transaction is expected to take place within the first four months of 2006 and is conditional upon satisfaction of various conditions, including regulatory approvals, merger control clearances, fundraising to finance the acquisition, and Ongame achieving net revenues in 2005 of not less than EUR 88.2 million and a profit before tax of not less than EUR 25.2 million.
The total consideration for the acquisition will be calculated by using a contractually agreed multiple of 5.37 of Ongame’s net revenues in 2005 and is therefore expected to amount to at least EUR 473.6 million.
The consideration will be payable as follows:
40% in BetandWin stock at an issue price of EUR 65.19 (average closing price during the 30 trading days prior to the announcement of 9 December 2005) with customary lock-up provisions of whereby no consideration shares can be sold within 6 months of the closing of the acquisition, with further restrictions limiting the volume of shares that may be sold in the market place for up to a further 18 months.
45% in cash to be raised from different sources the company is currently reviewing, including equity.
15% of the consideration will be retained by BetandWin as a deferred contingent payment. This payment may be deferred until Q1 2009 and the final amount is subject to adjustment depending on certain financial criteria in 2006.
“The acquisition of Ongame significantly advances betandwin’s ambition to be a leading global provider of online gaming by combining the two company’s excellent platforms. The transaction is expected to be earnings accretive from the first year of consolidation. The acquisition enables us to establish betandwin as a one-stop, global gaming and sports betting brand significantly earlier than either company could deliver independently. The opportunity to introduce new products to each company’s player base, through cross selling and new product introductions, as and when regulation and systems allow, will be of significant benefit to both customers and shareholders,” said Norbert Teufelberger, Co-CEO of BetandWin.
“Operationally, we will initially run Ongame and betandwin with their existing management teams. We will of course quickly address how to best harmonise our combined marketing efforts whilst we study how most efficiently to combine our human and technical resources. We are delighted that Patrik Selin, CEO of Ongame, and his management team will join our team in order to make our vision, to build a leading global online gaming player, come true,” added Manfred Bodner, Co-CEO of BetandWin.
“We are happy to join a group that has demonstrated its capability to successfully grow and diversify its proven business model. Together we will have an increased capacity to further develop our leading positions in sports betting and poker, and expand our offerings, including our poker network, to third parties while launching global campaigns for our proprietary brands,” said Patrik Selin, CEO og Ongame.
BetandWin said in a statement to the stock market that the acquisition presents major strategic advantages for the combined entity, including control of its IT development, complementary regional focus, excellent cross selling potential and addition of excellent management team.
Ongame, which has more than five million registered customers, had more than 260,000 active real money poker players during the third quarter of 2005 and generated about 80% of its revenues from the US and Canada.
The online poker operator was founded in 1999 by the Swedish entrepreneurs Oskar Hornell and Claes Lidell.
Hornell and his father and two brothers hold a 53 per cent stake in Ongame, while Lidell owns a 28 per cent stake and the former Chairman, Bo Johnson, has a 15 per cent stake. The remaining 4 per cent is owned by staff and former staff.
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