ACQUISITION OF ODDSALIVE LIMITED
betinternet.com plc, (“betinternet” or “the Company”) the global on-line gaming group, today announces the acquisition of Oddsalive Limited (“Oddsalive”), a Malta based on-line bookmaker, that specialises in soccer wagering across a wide selection of Scandinavian markets, as well as international sports.
betinternet.com plc is acquiring 100% of the issued share capital of Oddsalive for US $1 (one US dollar). In addition, the Company is also providing guarantees that customer deposits and trade creditors will be honoured. Arrangements with the vendors will ensure that the cost to betinternet is capped at $700,000 (£440,000).
The Company has entered into an ‘earn-out’ arrangement with the vendors, including the management team of six individuals, whereby gross profit less marketing costs are split 80/20 in favour of betinternet during the first two years of new ownership.
The ‘earn-out’ has been capped at $1m over a maximum 2 year period, and, furthermore, is only payable once betinternet has recovered its cash injection, estimated to be $500,000 (£314,000), which Oddsalive will receive following completion. The acquisition will be funded by betinternet from existing cash resources, which at 31 March 2003 exceeded £2m.
Oddsalive has 14,000 registered customers, of which approximately 4,500 have placed wagers in the last three months. In its latest financial year it generated revenues of $10.9m (£6.86m). Oddsalive has strong market awareness in Norway and other Scandinavian markets. The acquisition of Oddsalive has been approved by the Lotteries & Gaming Authority of Malta.
This transaction will strengthen the range of international sports and languages that betinternet can provide to its existing customer base of approximately 41,000, as well as providing systems enhancements and more extensive wagering opportunities for the Oddsalive customer base. betinternet intends to re-brand Oddsalive in due course. The technical infrastructure of Oddsalive will also be migrated to betinternet; the cost of this integration is not expected to exceed $50,000.
Commenting on the acquisition, betinternet’s Managing Director, Paul Doona said: “As one of the strategic initiatives alluded to at the time of our interim results, the acquisition of Oddsalive is an excellent first step in our aim of broadening our geographical reach and increasing our customer base.
“Oddsalive customers will benefit from being able to access the superior diversity of wagering opportunities available through betinternet, and our existing customer base will also benefit from a whole new range of Scandinavian sports.”
Paul Doona also commented on current trading saying: “Like the rest of the bookmaking industry, betinternet had a disappointing March, and the profit for the twelve month period to 1 June 2003, is, therefore, likely to be less than previously forecast. Nevertheless, I am pleased to confirm that the Company remains on track to record its maiden profit, since listing on AIM in May 2000.”