Gaming Realms proposes sale of majority stake in B2C casino brands
News on 27 Jun 2018
News on 27 Jun 2018
Gaming Realms plc has agreed the sale of a 70 percent stake in most of its UK Real Money Casino B2C brands to River UK Casino Limited, a subsidiary of Oslo Bors-listed River iGaming plc for a total cash consideration of up to GBP 23.1 million, conditional on shareholder approval.
The sale is in line with Gaming Realms’ strategy of focusing its resources on international licensing and content development, a press statement reads.
Brands involved in the transaction comprise Pocket Fruity, Spin Genie, Britain’s Got Talent Games, X Factor Games and associated business.
Following completion of the transaction, River iGaming will hold 70 percent of the issued share capital of River UK Casino, with Gaming Realms holding the remaining 30 percent.
In addition, River UK Casino has entered into a five year B2B platform and content agreement with Gaming Realms on normal commercial terms, which Gaming Realms expects will generate approximately GBP 1 million of annual revenue for the Group.
The total consideration of up to GBP 23.1 million comprises:
A minimum payment of GBP 8.4 million (of which GBP 4.2 million is payable on completion and GBP 4.2 million payable concurrently with the earnout payment); and
A further maximum cash payment of GBP 14.7 million on an earn-out basis, payable no later than 31 August 2019 (based on 70 percent of 5.5 times River UK Casino’s EBIT for the 12 months to 30 June 2019 minus the GBP 8.4 million minimum payment).
Gaming Realms’ current management team will run River UK Casino until at least 30 June 2020.
The deal excludes Slingo.com and the Slingo brands.
Commenting on the proposed sale, Patrick Southon, chief executive officer of Gaming Realms, said:
“We are delighted to announce this agreement with River iGaming. We believe that this sale will be transformational for Gaming Realms as it will enable us to focus more of our resources on international licensing and the development of new gaming content, placing us in a stronger position to drive further profitable growth in the future.”
The sale is conditional on receiving certain third party consents and the passing of a resolution which will be proposed at a general meeting on July 18, 2018.
