Last week's announcment of World Poker Tour Enterprises's second profitable quarter after some time in the doldrums (see previous InfoPowa reports) has, ironically, been followed by reports that it has largely been bought for just over $9 million by private investment group Gamynia. The consideration agreed is $9 075 000 plus a percentage of future revenues earned by Gamynia from the World Poker Tour and Professional Poker Tour brands.
The company informed interested parties that Gamynia intended to maintain all existing WPT operations, and in addition had plans to enter the online gaming sector. Gamynia has secured the services of online gaming marketing company Hardway Investments Ltd. which will seek to exploit and develop the WPT brands with the goal of maximising future revenue opportunities.
WPTE will sell its television library with full intellectual property rights, brand names, trade names, certain assumed contracts and tangible personal property, but is to retain cash and cash equivalents, certain investments, and future foreign sponsorship revenues from previous seasons, along with the licence of Season Seven of the World Poker Tour to PokerStars. WPTE will be responsible for certain office lease and employee obligations.
The agreement is subject to approval by WPT shareholders, but the company's statement points out that a group representing 39 percent of the WPTE's stock has already committed to the deal. None of the cash flowing from the acquisition will be distributed to company shareholders, because WPTE plans on using the proceeds of the sale to develop or acquire a non-poker business.
Steve Lipscomb, the president and CEO of WPTE said that he believed the deal would enable the company to realise its full potential across both its existing businesses and the lucrative online gaming market.
"Gamynia and its partners possess highly complimentary resources which will help it invest in and effectively integrate with the World Poker Tour efficiently and profitably," he said.
"In Gamynia, we have found a partner that already understands and fosters a spirit of cooperation in the online marketplace," Lipscomb added. "We believe that Gamynia and Hardway Investments Ltd. are uniquely positioned to join with our current partners and guide the World Poker Tour brands to fulfill their potential in the global poker marketplace.
"Our Board of Directors believes that WPTE shareholders will derive more benefit from the WPT and PPT brands in cooperation with these significant online gaming entities. Of particular importance for our partners is the fact that Hardway Investments has an established track record of creating revenues and value in the online gaming marketplace. After the transaction, WPTE will move forward under a new name and [we] will employ our cash in a new venture by developing a new business or combining, through one or more strategic transactions, with companies that have significant unrealized value or growth potential”
Last Wednesday World Poker Tour Enterprises announced that it had enjoyed its second consecutive profitable quarter in Q2 of 2009. Revenues were lower than those during the same period in 2008 – from $5.1 million to $4.6 million – but WPTE was able to make a profit due to the lower production costs of Season VII of the WPT broadcasts. In addition, international distribution of WPT broadcasts and the continued growth of ClubWPT.com had pushed the group into the black. Overall, income from continuing operations was $370 000 in the second quarter of 2009, compared to a $3.3 million loss in the second quarter of 2008
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