Gaming Realms, the AIM-listed gaming operator founded by the team behind Foxy Bingo creator Cashcade, has raised approximately £2.4m through the proposed placing of new shares in the company which it will use to fund the acquisition of specialist marketing agency Quick Think Media.
Gaming Realms has acquired London-based Quick Think Media (QTM), which has particular expertise in online bingo and casino products, for a total consideration of approximately £2.2m.
The company said that the deal supports its strategy to establish itself within the bingo and casino segment of the social gaming market, as well as launch real money online bingo and casino games in the UK.
“QTM will enhance Gaming Realms's activities by cost-effectively capturing new users across emerging digital channels including Facebook, as well as cross promoting players to its own databases and vice versa,” said the company in a statement Wednesday. “QTM trades profitably and will bring a significant revenue stream to the business.”
The business generated a profit before tax of £228,000 for the year ended September 30th, an increase of 18 per cent versus the previous year, and has gross assets of £119,000.
Founded by Tom Gooding, Simon Smiley and David Hampstead, the London-based specialist marketing agency has a number of high profile clients in the gaming arena including bet365, Ladbrokes, Paddy Power and Zynga.
Gooding, Smiley and Hampstead were also the founders of Bejig, the social casino business sold to Gaming Realms earlier this year, who also have previous experience working for the likes of Jackpot Joy, Rank and Ladbrokes.
Tom Gooding, one of the company’s co-founders, said he was “very excited” by the opportunities the deal brings.
“We have developed an innovative marketing capability which we believe will complement Gaming Realms's existing marketing activities,” said Gooding. “We look forward to deepening our relationship with Gaming Realms and contributing to the development of a leading online gaming business.”
Gaming Realms will pay aggregate consideration of £2.2m to acquire the business, comprising £1.5m in cash and a deferred payment of 3,571,428 new ordinary shares, being the equivalent of approximately £0.75m at a price of 21 pence per share to be allotted and admitted to trading 12 months from completion.
QTM has given certain customary warranties to Gaming Realms, which last for 18 months from completion, and are limited to a maximum aggregate liability of the aggregate consideration.
Gaming Realms’ executive chairman Michael Buckley said the company was pleased to welcome the QTM team into the group.
“Our combined marketing operations will be able to secure new customers over a shorter timeframe and at lower cost across the business, particularly in the new digital channels which are now available,” he said. “In addition, QTM brings a growing profit stream and user base into the group, both of which can be used to further enhance our brand development activities.
“The online gaming environment is expanding, particularly in the mobile and tablet space where we are focused, and we are optimistic for the future of the company.”
Gaming Realm has this morning placed 11,476,190 new ordinary shares at a price of 21 pence per share to raise proceeds of approximately £2.4m (net of expenses). The funds will be used to satisfy the cash element of the QTM acquisition, with the balance being used for additional working capital. The placing represents 7.3 per cent of the company’s enlarged share capital.
Shares in Gaming Realms plc (Co. Data) (AIM:GMR) are currently trading at 22.50 pence per share in London this morning, having dropped 4.26 per cent in trading Tuesday.