Playtech further diversifies business with PokerStrategy acquisition11th July 2013 7:08 am GMT
London-listed gaming technology and services provider Playtech has acquired Gibraltar-based poker school and affiliate website PokerStrategy.com from etruvian Holdings for a total consideration of €38.3m.
The acquisition also includes etruvian’s recently launched online casino affiliate business CasinoCheck.com and what was previously etruvian Consulting.
Playtech said the deal would be complementary to both the company’s PTTS marketing division and its overall iPoker poker offering, and provides a community-based model for player acquisition “which is attractive to both social and real-money players in existing and soon to be regulated markets.”
“The acquisition will allow Playtech to further diversify its business by providing licensees with access to the world's largest independent poker community with over six million members, thereby cementing existing relationships and creating incremental opportunities for both software and PTTS marketing,” the company added in a statement.
PokerStrategy.com targets European markets and utilises an online poker school and player community to provide professional content in more than a dozen languages to attract new and experienced players. The website aims to help players improve their game through tailored training content by way of video clips, professional content and tips, with the goal to ultimately increase player value.
The business generates income on a revenue-sharing model in respect of players introduced to its clients for a period following player sign-up. Last year, it generated a profit before tax of approximately €19.5m and held net assets of €16.3m at the end of December.
Over the past two years, two of PokerStrategy’s larger customers terminated their contracts, but remain contractually obligated to continue to pay fees in respect of players acquired prior to the termination until 2015.
Playtech will acquire PokerStrategy.com and “certain of its subsidiaries” for an aggregate €38.3m (subject to working capital adjustment), which will be funded from the company’s existing cash resources.
As part of the deal, PokerStrategy is providing customary warranties and indemnities along with non-compete and non-solicitation warranties in respect of the business, staff and customers.
PokerStrategy’s two founders, Dominik Kofert and Enrique Guzmán, will provide a guarantee of the company’s obligations and will both remain with the acquired business on a consultancy basis, Playtech confirmed.
The current PokerStrategy management team, consisting of CEO Damian Sokol and chief operating officer Pavel Stehno will stay in place.
Playtech maintains that given the combination of cost and revenue synergies, the acquisition will be earnings enhancing.
In a statement, PokerStrategy said that it will stay “fundamentally” the same and maintain its independence in the market, while continuing to work with all its current partners and adding additional poker rooms.
The company will work closely with Playtech behind the scenes by helping to upgrade the poker software and enhancing the iPoker network with the active participation of the poker community.
“Our goal is to help iPoker improve the poker product for players of all skill levels, recreational and professional players alike,” the company said.
etruvian will remain as a standalone business and will now concentrate on its tradimo and feelgood.de businesses.