MORE ONLINE CASINO CONSOLIDATION
1 September 2006
Chartwell Technology and Parlay Entertainment agree to merge
Two gambling software developers and providers in Canada have agreed to the latest industry merger this week. Chartwell Technology Inc. and Parlay Entertainment Inc. intend to combine their businesses and talents as agreed in a binding letter of intent (LOI) executed on Aug. 30, 2006.
The merger will combine two significant international software providers in the Internet-gaming arena with a compatible customer base, complementary product offerings and identical business models, to better compete on the global stage.
The LOI calls for Chartwell to acquire all of the issued and outstanding common shares of Parlay by way of a plan of arrangement, or similar business combination, subject to obtaining all necessary regulatory and court approvals, and the approval of the Parlay shareholders at a meeting scheduled for October this year. The deal is additionally subject to the completion of satisfactory due diligence by both parties.
Chartwell will issue one 0.75c common share of Chartwell for each issued and outstanding common share of Parlay. Assuming completion of the transaction, Chartwell will issue up to approximately 11.2 million common shares in exchange for all of the issued and outstanding Parlay common shares, and post-closing, will have approximately 29.9 million issued and outstanding common shares. Outstanding options and warrants to purchase Parlay common shares will either be exercised, cashed out or converted into options or warrants to purchase Chartwell shares.
Major shareholders who are also directors of Parlay, holding approximately 22 percent of the issued Parlay common shares, have already agreed to enter into agreements with Chartwell confirming their support for the proposed merger. Chartwell and Parlay have each agreed, under certain circumstances, to pay a termination fee of $500 000 to the other party if the merger is not completed as agreed.
Once the merge is complete, the Chartwell board of directors will consist of two founders each of Chartwell and Parlay, and three independent directors. An office of the chief executive officer will be established, with the president and chief executive officer each of Chartwell and Parlay acting as co-chief executive officer of the Chartwell merged group.
A merger committee with representatives of both companies will be established to plan for and manage the technical, financial and operational aspects, and the senior executive teams of both Chartwell and Parlay will be combined in Chartwell following the merger.
Commenting on the agreement, Darold H. Parken, president and chief executive officer of Chartwell, said: "Chartwell and Parlay are a perfect fit. In an ever-expanding remote-gaming industry, Chartwell and Parlay share a unique and highly successful business model, and enjoy great reputations. Our combined entity will be a much stronger and effective competitor, and our customers will benefit from the merger of our best-of-breed gaming applications and our talented group of people. We are very excited about joining forces and working with the people at Parlay to build the world's most comprehensive and flexible gaming software system, while maintaining our independence from the operation of any gaming business."
Scott White, president and chief executive officer of Parlay, added: "Consolidating two growing businesses like Parlay and Chartwell is the first step in our joint creation of a global technology powerhouse. Leveraging our respective excellence and leadership in technology, our common employment cultures, our existing and prospective customer bases, and our depth in human resources, we are confident in our ability to develop, license and support a world-class suite of e-gaming products. It is our intention to create a new company, which will generate excellent value for our stakeholders and, as our industry moves into the mainstream over the coming years, the fact that we will not compete with our customers will be our most important value proposition."
Online Casino News courtesy of InfoPowa
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