Canada’s Intertain Group confirmed Thursday that it will acquire most of Gamesys’ customer-facing assets in a deal worth approximately £425.8m.

The assets include the real-money Jackpotjoy online bingo brands in the UK and Sweden, casino brand Starspins.com, Spanish-facing bingo brand Botemania.es, as well as Gamesys’ social gaming offerings, Jackpotjoy Social Casino and the soon-to-launch Social Starspins.

Intertain has entered into a binding share purchase agreement to acquire 100 per cent of the issued and outstanding shares of a newly-incorporated subsidiary of Gamesys, which will hold all of the brands and player data assets comprised within the Jackpotjoy business (including Starspins.com and Botemania).

Gamesys and its subsidiary, Gamesys (Gibraltar) Limited have also agreed to enter into a ten-year services agreement to provide platform services and gaming content to enable Intertain to run the Jackpotjoy business. This includes the potential to licence certain gaming content for up to a further ten years.

"Our stated vision is to focus on the female demographic, in regulated markets,” said Intertain CEO John Kennedy FitzGerald. “This acquisition is consistent with this vision. We feel privileged to be inheriting this strong community of players.

“We have not only acquired the leading online, bingo-led business, but we are also entering into a long-term relationship with one of the most well respected, technology and gaming operators, Gamesys.”

The initial purchase price will consist of cash and share consideration worth approximately £425.8m, subject to a customary working capital adjustment, plus certain cash earn out payments. Of this, £56.8m will be funded through the issuance of Intertain common shares to Gamesys.

The acquisition will be mostly financed through US$352.5 million senior secured credit facilities, consisting of a $335.0m term loan and a $17.5m revolving credit facility fully underwritten, subject to customary conditions, by Macquarie Capital.

The transaction will also be funded through a bought public offering of 28m subscription receipts at a price of $15.00 per receipt, worth approximately CAD$420.0m.

There will be a three-year earn-out based on future EBITDA performance of the Jackpotjoy business after the closing of the transaction, and future earn-out payments in years three, four and five after the closing date, contingent upon the Jackpotjoy business achieving certain EBITDA targets in such years.

Intertain said that the deal will make it the largest provider of online, bingo-led gaming, with high proportion of its revenue derived from regulated markets. Over 90 per cent of the Jackpotjoy business is sourced from regulated markets, the company said.

For the twelve month period ended September 2014, the Jackpotjoy business generated gross win of £130.9m, generating EBITDA of £67.0m.

Following the deal, Intertain will become one of Gamesys’ largest B2B customers. Gamesys’ principal shareholder, founder and managing director, will join the Intertain board of directors as a non-executive director.

"Gamesys and Intertain are a perfect match,” said Hayden. “From our earliest discussions we shared their vision which we know is critical to a successful long-term partnership. This is a great deal for Intertain and Gamesys, our shareholders, our employees and our players.”

Jackpotjoy launched in the UK in 2002 and in Sweden in 2012. It is the leading bingo operator in the UK market with over 100,000 monthly active users across the UK, Ireland and Sweden.

Casino brand Starspins launched in the UK in 2013 and currently has over 7,000 monthly active users, while Spanish bingo brand Botemania launched in 2007 and has approximately 5,000 month active users. Intertain said that it expects significant growth in this business, with the reintroduction of slots in Spain during the first half of this year.

Jackpotjoy Social Casino was released globally in 2011 and has 1.2m active users, while Social Starspins is scheduled to launch in the H1 of this year, building on the success of the Jackpotjoy Social Casino.

Gamesys will continue to run Virgin Games under a long-term licence and partnership arrangement, and operate gaming sites and apps for other partners including News Corporation, Heart FM and Caesar's Casino.

The boards of directors of Intertain, Gamesys and the relevant members of Gamesys' group have unanimously approved the transaction.

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