Party Gaming confirms Cashcade acquisition (Update)

Reports in The Times newspaper over the weekend that Party Gaming plc has acquired Cashcade plc have been confirmed by the online gambling group.
In a statement Thursday, Party confirmed that the consideration agreed is an initial payment of GBP 71.9 million in cash with up to a further GBP 24 million in cash contingent on future profit performance.
Cashcade has been acquired on a debt-free/cash-free basis, and Party expects the acquisition to be earnings enhancing, pre-amortisation of intangibles, in 2009.
In the year ended 31 December 2008, Cashcade generated net revenue of GBP 44.9 million (2007: GBP 28.5 million) and EBITDA of GBP 12.2 million (2007: GBP 4.9 million), implying an acquisition multiple of 5.9 times 2008 EBITDA.
The acquisition is being financed from existing cash resources.
Cashcade’s skills and experience will boost PartyGaming’s existing bingo activities, the announcement notes.
Commenting on the deal, Jim Ryan, PartyGaming Chief Executive Officer, said: “Cashcade provides us with an excellent platform to build a meaningful share of the $1.5 billion global online bingo market.  Our M&A objective is to acquire companies that can put us into a top three position in each of our four product verticals and deliver substantial revenue and cost synergies.  Our longer-term strategic objective is to become the market-leader in online poker, casino, sports and bingo.”
Patrick Southon, Cashcade’s Managing Director, said: “This is a very exciting day for Cashcade and we are delighted to join the PartyGaming organisation.  We believe there is a substantial opportunity to leverage our existing business now that we are part of the world’s leading online gaming company.”

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