Playtech, the listed international designer, developer and licensor of software for the online and land-based gaming industry, has agreed to acquire certain assets and undertaking of Tribeca Tables Europe.
Tribeca is a software designer that provides a poker network solution to a number of the world’s most respected online poker operators such as VCPoker, PaddyPower Poker and Blue Square Poker.
In addition to software development, Tribeca also specialises in eMarketing and the development of online poker communities. Most recently, the company announced that the Tain poker network would be joining the Tribeca network, of which the Scandinavian group, Expekt, is the largest customer.
In the 12 months to December 31, 2005, the assets to be acquired generated turnover of US$6.2m and gross profits of $5.3m, and in respect of the last three calendar months preceding the date of the acquisition, the assets to be acquired generated a turnover of $3.9m and gross profits of $3.4m.
Following Tribeca’s decision to block certain territories, including the US, the company’s entire network will cease its operations in six months from the date of the agreement, by which time the migration of the online poker operators to Playtech’s platform is planned to be complete.
"This is a landmark deal for Playtech, which in one move transforms the company into the world’s leading poker network that excludes US players," commented Avigur Zmora, CEO of Playtech. "Tribeca is an outstanding fit for us and the company’s licensees are operating, for the most part, in different geographical locations to Playtech’s current poker licensees.
Playtech expects that synergies between the two companies will lead to ‘significant’ savings in respect of the additional costs involved in supporting the migrated licensees. Additionally, the company expects higher revenues to be generated by the increased player liquidity, as well as the introduction of Playtech’s casino games to the migrated licensees.
The consideration for the acquisition is calculated according to a formula based on Playtech’s earnings from the acquired assets. On the basis that the company will generate $16m over the coming year from the migration date, the consideration to be paid for Tribeca will be $75m.
The final consideration will be adjusted upon Playtech’s realised revenues. The maximum consideration that the company will be liable to pay is $139m, which will be paid in the event that the revenue generated from this acquisition exceeds $29m over the coming year from the migration date.
