Isle of Man-based investment firm Fairground Gaming has announced that it has
entered into a conditional purchase agreement to acquire all of the online gaming
businesses and subsidiaries, which collectively form The Spin Palace Group from
Roundit Limited.
The acquisition is the first by Fairground Gaming since admission to London's
Alternative Investment Market (AIM) in October 2005. The maximum consideration will
be US$66m.
Fairground Gaming was formed in 2005 with the specific purpose of taking advantage
of expected consolidation within the online gaming sector. The firm enjoys the
financial backing of shareholders drawn from leading institutions, players within
the gaming industry and private client firms.
The Spin Palace Group comprises two recently combined businesses, Spin Palace
and Piggs Casino, and is a licensed online casino and poker group offering over
200 different games to a global customer base. Its core domains include www.spinpalace.com,
www.rubyfortune.com, which is aimed at female gamblers, and www.piggscasinos.com.
Commenting on the proposed acquisition, Evan Hoff, Chief Executive of Fairground
Gaming, stated that the Spin Palace Group will be "the cornerstone"
in the execution of Fairground Gaming’s consolidation strategy.
"Both Spin Palace and Piggs Casino are well managed and cash generative
businesses and, combined, we believe they have the potential to be scaled upwards
to enhance future revenues of the Company. We look forward to working with management
in growing the business and seeking out complementary acquisitions that will
assist us in achieving further scale and product and geographic diversification,"
he explained.
The initial consideration is approximately US$46m, consisting of a US$10m cash payment
from existing Fairground Gaming resources with the remainder being satisfied
through the issue of ordinary shares in Fairground Gaming and warrants over
Ordinary Shares in Fairground Gaming.
Further earnout consideration is payable of up to US$20m, dependent upon the earnings
before tax of The Spin Palace Group for the year to 31 December 2006.
The reverse merger must be approved by shareholders at an extraordinary meeting
set for 12 June.
INVESTORSOFFSHORE.COM
