Online gaming company 888 just agreed to buy Wink Bingo for a price that could reach as high as $96 million. Following a large down payment, the remainder of the price will depend on the site’s performance in coming months. 888 made the purchase to increase their presents in the rapidly-growing online bingo market.
New York Times: 888 Buys Wink Bingo For Up to £60 Mln
Online gaming company 888 just agreed to acquire Wink Bingo from its current owner Daub Ltd for as much as 59.7 million pounds, and said that current trading remains strong and in line with projections.
888 develops new gaming products like bingo to help offset the effect of online gambling becoming illegal in the United States two years ago, which lead to the loss of half of the group’s sales income. Today, bingo is the fastest growing area of its online business.
“We are delighted to announce the Wink Bingo acquisition as an expansion of our B2C online Bingo footprint in the lucrative UK market. The transaction is financially attractive and will be earnings enhancing,” said Gigi Levy, 888’s CEO.
Details suggest 888 will first pay 11 million pounds to Daub on completion, followed by subsequent payments based on performance. Payments are set between five and six times the businesses earnings before interest, tax, depreciation and amortisation in the year to March 31, 2011.
Wink Bingo saw revenue of 15 million pounds with pretax profit of 1.3 million pounds in the 11 months prior to November 30th.
Shares in 888 were up 1.1 percent, trading at 112.8 pence.
domain-b: 888 acquires online game Wink Bingo for $96 million
Gibraltar-based 888 Holdings Plc. Recently agreed to buy Wink Bingo for as much as £60 million ($96 million) in an effort to enhance the company’s presence in the online bingo market, which is the fastest-growing area of the internet gaming industry.
An initial payment of £11 million will be given to Wink’s current owners Daub Ltd., followed by as much as £48.7 million in late 2011 depending on performance. This second payment is capped at £59.7 million.
Wink Bingo arrived with a bang in early 2008, and soon became very well known. Sponsoring popular UK television show’s like Harry Hill’s TV Burp and running amusing adverts like the Dancing Dog helped Wink Bingo increase their player base by more than 60,000 players each month.
With this acquisition, 888 hopes to catch up with bingo competitors Gala Coral, PartyGaming and Gamesys. In July, 888 lost a bidding war with PartyPoker when trying to acquire Cashcade, owner of Foxy Bingo, which also sold for £96 million.
888 reported that trading in this fourth quarter remains strong, showing growth of about 8 per cent over the third quarter of 2009.
London Evening Standard: 888 gets the nod for online bingo business Wink
Online gambling company 888 today dished out £60 million for an internet bingo business that started less than two years ago.
888 will pay Daub Limited, owners of Wink Bingo, as much as £59.7 million for the bingo business, which also includes the brands Posh Bingo and Bingo Fabulous.
The fast-growing industry of internet is very attractive to online gaming firms like 888 and PartyGaming, which are both constantly looking for partnerships.
Wink Bingo was just launched in 2008 but already supports more than 60,000 active members, making it one of the more popular bingo sites on the net.
It saw revenues of £15 million and profits of £1.3 million during the first 11 months of 2009.
888 will pay £11 million up front, with the remainder of the price possibly reaching as high as £59.7 million – this depends on the site’s performance in the next year.
888 chief executive Gigi Levy said: “We are delighted to announce the Wink Bingo acquisition as an expansion of our online bingo footprint in the lucrative UK market.
“The Wink team has a proven track record of excellence and will be a great addition to our growing bingo business.”
Levy also remarked that trading at 888 “remains strong and is in line with management’s expectations”.
Gaming group 888 has had a difficult 2010 and it seems things are only going to get worse. After releasing a profit warning showing that poker turnover had decreased by 18% between January and May, 888 now anticipates losing even more business during the 2010 World Cup this summer. While 888 blames an industry-wide decline, currency fluctuation and even illegal casino operators for their woes, some financial experts wonder if 888 is ripe for a takeover.
The Guardian: Gaming group 888 could attract predators after profit warning
After a gloomy warning from 888 spokespeople regarding revenue between January and May, the company has left itself vulnerable to takeover. Following up on a similar negative forecast released in April, 888 showed that the number of players at its poker website dropped by about 18% in the first five months of 2010.
Though 888 believes the downward trend to be industry-wide and that its own program of cost-cutting must be adhered to, spokesmen maintained that 888 would continue its strategy of acquisition – a plan 888 seems to be incapable of at present.
Rumors that bigger companies Party Gaming and/or Ladbrokes might make a bid at a takeover of 888 emerged while 888 stocks lost 21% of value on the day of the announcement to finish trading at 53.25p. Greg Johnson of investment banking services provider Shore Capital stated that Ladbrokes “needs greater scale in its online operation, in our view,” making 888 operation a perfect match.
This is London: 888 will spend World Cup behind the sofa as it predicts strain on profits
Internet casino 888 warned that the upcoming World Cup would actually be bad for its business, as its staple poker players are expected to be spending less time and money at the online poker tables and instead devote more energy to football. “Online gaming trading during the period of the World Cup will be difficult,” said 888 CEO Gigi Levy as he announced the profit warning.
Levy also stated that profits for 888 in year 2010 would be “significantly lower than previous market expectations” of $45.5 million.
As for the current drop in poker business at 888, illegal online operators in America were blamed for eating into profits, though the numbers show that high-rollers visit the site less frequently than ever. Levy also blamed currency fluctuation for its financial woes, stating that $5 million in revenue had been lost in 2010 so far because of exchange rates: Though 888 does most business in euros and pounds sterling, revenue is reported in terms of U.S. dollars.
The (London) Express: 888’s World Cup Fears
Online gaming company 888 Holdings issued a warning on profits yesterday in anticipation of casino gamers deserting the site to turn attention to the 2010 World Cup tournament: “Instead of staying in and using 888,” said one 888 spokesman, “people are more likely to go down the pub and watch the football.”
A pair of financial analysts offered harsh assessments of 888’s current financial state. One unnamed analyst stated that “The potential for 888 to be acquired has diminished,” while James Hollins of corporate advisory firm Daniel Stewart & Co. said that “888’s weak poker offering and lack of significant sports offering has worked against it.”