Gioco Digitale Acquisition to Cost bwin €115 million14th September 2009 8:15 am GMT
In a deal which will position the company as one of the leading online poker providers in Italy, bwin Interactive Entertainment AG confirmed Monday that it has finalised the acquisition of Italy's Gioco Digitale S.p.A for a total consideration of up to €50 million in cash together with 2.3 million of its own shares, valuing the deal at just over €115 million.
Under the arrangement, Gioco Digitale shareholders will surrender 752,474 of the company's shares, representing 56.3% of the total share capital, in exchange for 2.3 million bwin shares. bwin will acquire the remaining 43.7% of Gioco's share capital for an initial consideration of €25 million in cash on conclusion of the transaction, plus a further €20 million in cash payable on presentation of Gioco's audited accounts for 2009.
A further €5 million in cash will be paid 18 months after closing subject to the achievement of certain financial performance targets in 2009. bwin said that the share exchange will be financed from authorised share capital excluding the subscription rights of existing shareholders, whilst the remaining Gioco shares will be acquired using existing cash resources.
The deal will enable bwin to capitalise on the growth potential of the Italian online gaming industry, with new laws recently enacted to allow poker cash games and other games of chance in addition to sports betting and online poker tournaments.
Gioco Digitale currently operates one of Italy's leading online poker sites, generating a total income of €20.1 million during the first half of 2009, of which 94% was derived from its poker products. The company generated an EBITDA of €9.2 million during the period.
Gioco Digitale has over 80,000 active customers per month and a market share of 19.2% as of last month. According to bwin, the transaction will give the company a combined 25.5% share of Italy's online poker market.
Gioco Digitale was founded by its CEO and President, Carlo Gualandri, who will head up bwin's Italian business as well as working alongside bwin co-CEOs Norbert Teufelberger and Manfred Bodner, advising on business developments in soon-to-be liberalised European online gaming markets.
"Gioco Digitale ideally positions bwin to take advantage of the opportunities offered by the booming Italian online gaming market, which is sustained by modern, pro-active regulation," said Norbert Teufelberger, Co-CEO of bwin.
Carlo Gualandri, CEO of Gioco Digitale, said: "We are delighted to be joining the bwin organization and continuing our development as Italy's leading online gaming operator. We are excited about the new opportunities provided by bwin's excellent technology platforms for poker and sports betting, as they will give our customers access to the most complete product portfolio available online.
"I am especially delighted to be joining Manfred Bodner and Norbert Teufelberger to help them continue building-up the clear leader in the booming online gaming industry. We look forward to extending and replicating the success we have had in Italy in the other European countries that are due to follow Italy's liberalization and market regulationm," he said.
Manfred Bodner, Co-CEO of bwin added: "This underlines our commitment to continental Europe's largest online gaming market. Previous investment in the brand - particularly in the form of bwin's extensive sponsoring of AC Milan - will enable us to obtain maximum benefit from the enlarged scale of bwin's Italian operations under the leadership of Carlo Gualandri and his team."
The Share Purchase and Contribution Agreement is subject to the approval of bwin's Supervisory Board, with the transaction scheduled to be concluded in early October.
Shares in bwin Interactive Entertainment AG (Co. Profile) (BWIN.VI) are currently trading at €28.03 this morning in Vienna, valuing the total acquisition at just under €115 million.