Friday July 12,2013 : PLAYTECH CONFIRMS ACQUISITION OF POKER STRATEGY.COM
Consideration of Euro 38.3 million will be funded from existing cash resources to acquire affiliate marketing giant
Online gambling software group Playtech plc has confirmed rumours earlier this month that it is about to acquire the high profile and Gibraltar-based online poker information and affiliate marketing site Poker Strategy.com. Describing the acquisition as a "bolt on" project, Playtech revealed Thursday that the price it is paying is Euro 38.3 million, which will be funded from existing cash resources.
The business complements both Playtech's poker offering and its PTTS marketing division, a company statement noted.
The acquisition from owner Etruvian Holdings Limited includes certain of Poker Strategy's fellow subsidiaries, which Playtech describes as "….one of the world's largest poker affiliate businesses, targeting European markets and utilising an online poker school and player community to provide professional content in more than a dozen languages to attract new and experienced players and help them 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 statement notes that Poker Strategy and its subsidiaries generate income on a revenue-sharing model in respect of players introduced to its clients for a period following player sign-up.
Dominik Kofert and Enrique Guzmán, the two founders of Poker Strategy, are providing a guarantee of the seller's obligations and will both remain with the acquired business on a consultancy basis. Conditions attached to the deal include agreements on non-compete and non-solicitation provisions.
Playtech directors believe the acquisition is complementary to both Playtech's PTTS marketing division and its overall poker offering, further strengthening Playtech's position in online poker and providing 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.
For the period 1 January 2012 to 31 December 2012, Poker Strategy generated a profit before tax of approximately Euro 19.5 million. As at 31 December 2012, it had gross assets of approximately Euro 18.5 million and net assets of approximately Euro 16.3 million.
Playtech believes that given the combination of cost and revenue synergies, the acquisition is earnings enhancing.