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PARBET IS CRYPTOLOGIC'S NEXT ACQUISITION
Maltese operator in mind for Parbet in deal to increase player liquidity in Scandinavian markets
Turnkey provider Cryptologic branched out to the poker room acquisition business this week, announcing that it has agreed to purchase the Scandinavian poker room Parbet.com for Euro 9 million.
The purchase agreement includes all rights to the Parbet brand name, associated domain names such as Parbet.com, customer lists, databases and players' cash on deposit. Under the agreement, subsidiary WagerLogic will pay Euro 9 million for the brand and assets, and potentially additional amounts up to a maximum amount of Euro 4 million, contingent on improved performance of the assets over a six-month earn-out period.
The Parbet assets currently generate approximately US$7 million in revenue annually. CryptoLogic expects the licensing arrangement to add approximately US$2 million to 2007 earnings.
According to a company spokesman, the intention is to license the Parbet assets, poker software, payment processing services, multi-lingual customer support and services to a private and as yet unidentified Maltese online gaming company that will operate the company.
"We have advanced several key strategies today," said Lewis Rose, CryptoLogic's President and CEO in announcing the deal.
"First, we have invested a small portion of our significant cash balance to immediately increase return to shareholders. Second, we have built on our acknowledged strength in the European poker market. Third, we have advanced our strategy to own or control strategic brands in order to increase their success and earn greater returns. And we still have more than ample resources to take advantage of additional strategic opportunities in the future."
This purchase extends the company's brand ownership and management strategy, which it has used very successfully with the award-winning InterCasino and InterPoker brands and related brands, such as ExtremePoker. Under this strategy, WagerLogic owns or controls key brands that it licenses to third party operators, along with its full suite of online gaming software, network services, and marketing support services, in order to generate higher revenue to WagerLogic.
Subject to certain closing conditions, the agreements are expected to be completed by January 15, at which point Parbet players will be migrated to the WagerLogic poker network and begin enjoying its benefits immediately.
"This is a very exciting development for Parbet players," stated Andy Goetsch, CryptoLogic's Vice President, Poker Software Development. "They will now enjoy a poker network with triple the liquidity, attractive room-wide incentives and a platform that is one of the most stable in the industry. All WagerLogic licensees and their players will benefit from the increased liquidity which Parbet, and all new licensees, add to the network."
"We continue to demonstrate our commitment to be at the forefront of the next wave of poker growth in Europe," said AJ Slivinski, WagerLogic's Managing Director. "In December we launched two new poker sites. In mid-January, we will launch three more poker sites: Parbet, Betsafe and Playboy Poker."
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