888 to Acquire Wink Bingo for Up to £59.7 million22nd December 2009 8:30 am GMT
Further expanding the company's emerging offering segment, 888 Holdings plc said Tuesday that it has entered into an agreement to acquire Daub Limited's Wink Bingo for an initial £11.0 million, with earn-out payments subject to certain adjustments up to a total maximum consideration of £59.7 million.
The acquisition through a wholly owned subsidiary of 888 will see the company take control of several Wink Bingo brands including Posh Bingo and Bingo Fabulous, all of which operate on the Dragonfish bingo network. Wink Bingo alone has over 60,000 active players as of October 2009.
The consideration payable to Daub Limited consists of a base price of £11.0 million, paid in cash on completion, and earn-out payments subject to certain adjustments.
The earn-out payment will be performance-based between five and six times earnings before interest, tax, depreciation and amortisation (EBITDA) of Wink Bingo during the 12 months ending March 31st 2011 and will be paid in cash during Q2 2011.
The total maximum consideration payable by 888 to Daub is capped at £59.7 million. Completion of the transaction is subject to satisfaction of various closing conditions, which include among others, obtaining certain required consents.
During the 11 month period ended November 30th 2009, Wink Bingo had revenues of £15 million and profit before tax of £1.3 million. Wink Bingo and its subsidiaries held gross assets of £1.6 million.
The transaction marks a further expansion of 888's B2C emerging offering segment, which grew by 99% during the first three quarters of 2009.
"We are delighted to announce the Wink Bingo acquisition as an expansion of our B2C online Bingo footprint in the lucrative UK market," said Gigi Levy, CEO of 888 Holdings. "The Wink team has a proven track record of excellence in marketing, CRM and execution and will be a great addition to our growing Bingo business. In addition the transaction is financially attractive and will be earnings enhancing."
888 said that trading during the final quarter of 2009 remains strong and in line with management's expectations. The company remains confident about its prospects for the full year.
Shares in 888 Holdings plc (Co. Profile) (LSE:888) are currently trading at 111.50 pence per share in London this morning.