The memorandum of understanding announced last week between Sweden-based Ongame e-Solutions AB, the parent company of online poker network Ongame.com, and Austria's BetandWin.com, has quickly progressed to a share purchase agreement in which BetandWin will acquire 100 percent of Ongame's shares for a total consideration of around €473.6 million.
Both companies confirmed today that a deal is in place.
"We are happy to join a group that has demonstrated its capability to successfully grow and diversify its proven business model," Ongame CEO Patrik Selinsaid in a statement. "Together we will have an increased capacity to further develop our leading positions in sports betting and poker, and expand our offerings, including our poker network, to third parties while launching global campaigns for our proprietary brands."
Manfred Bodner, Co-CEO of BetandWin.com Interactive Entertainment AG, elaborated on the merging of the two company's resources.
"Operationally, we will initially run Ongame and BetandWin with their existing management teams," he said. "We will of course quickly address how to best harmonize our combined marketing efforts whilst we study how most efficiently to combine our human and technical resources. Patrik Selin and his management team will join our team in order to make our vision--to build a leading global online gaming player--come true."
Ongame's leading online poker site, PokerRoom.com, reported more than 5 million registered customers in November and more than 260,000 active real-money players in its poker network in Q3 2005. Net sales grew last year by approximately 253 percent, with an operating margin of approximately 33 percent.
The absorption of Ongame's players will give BetandWin a larger presence in North America, where it has very little exposure.
The transaction is expected to close within the first four months of 2006, pending approval from BetandWins's supervisory board and various regulatory approvals. Upon satisfactory compliance with the conditions, the total consideration of €473.6 million will be paid to Ongame as follows:
- 40 percent in BetandWin stock at an issue price of €65.19, with additional lockup provisions in which no consideration shares can be sold within six months of the closing of the acquisition, with further restrictions limiting the volume of shares that may be sold in the market place for up to 18 months;
- 45 percent in cash to be raised from different sources that BetandWin.com Interactive Entertainment AG is reviewing, including equity; and
- 15 percent to be retained by BetandWin as a deferred contingent payment, which may be deferred until Q1 2009, wit the final amount subject to adjustment depending on certain financial criteria in 2006.
is the senior staff writer at IGamingNews. She lives in St. Louis, Mo.