TIDMRNK
RNS Number : 7938O
Rank Group PLC
22 May 2018
22 May 2018
The Rank Group Plc
LEI: 213800TXKD6XZWOFTE12
Acquisition of YoBingo.es by The Rank Group Plc
The Board of The Rank Group Plc ('Rank') is pleased to announce
that Rank has acquired the entire issued share capital of QSB
Gaming Limited ('QSB'), owner of YoBingo.es, a leading Spanish
digital bingo business for an initial consideration of EUR21
million and, subject to future performance, up to a maximum
consideration of EUR52 million in cash (the 'Acquisition').
Strategic highlights
-- Secures a strong digital bingo and casino presence in Spain,
a high growth regulated digital gaming market;
-- Top 2 online bingo operator in Spain with a greater than 30%
bingo market share and over 5% slots market share;
-- Provides Rank with a proprietary platform including online
bingo, roulette and video bingo content for the Spanish market with
strong potential to support other regulated markets;
-- Provides a brand with strong national recognition in Spain;
-- Accelerates the multi-channel strategy of Rank's established Spanish brand, Enracha; and
-- Deepens Rank's commitment to the Spanish gaming market.
Financial highlights
-- For the year ended 31 December 2017, QSB and its subsidiaries
(the 'YoBingo Group') generated revenue and EBIT of EUR10.4 million
and EUR2.5 million respectively;
-- Total purchase enterprise value of up to EUR52 million; and
-- EPS accretive.
Commenting on the Acquisition, John O'Reilly, Chief Executive of
Rank said:
"The acquisition of the YoBingo Group expands Rank's digital
footprint in Spain. Spain is an exciting high-growth regulated
market which we believe offers strong multi-channel potential. The
YoBingo Group is a well-established operation that we intend to
further develop and to cross-sell into our established Spanish
retail operations."
Enquiries
The Rank Group Plc
Sarah Powell, Communications Tel: 01628 504 303
Director
FTI Consulting LLP
Ed Bridges Tel: 020 3727 1067
Alex Beagley Tel: 020 3727 1045
Overview of the YoBingo Group
The YoBingo Group is currently one of the leading online bingo
operators in Spain. Having been established in 2012, shortly after
Spain regulated online gambling, YoBingo.es is now a
well-recognised brand which offers substantial potential to grow in
what is a fast growing market.
Headquartered in Malta and licensed in Spain, the YoBingo
Group's principal operating company, Bingosoft plc ('Bingosoft'),
operates the website YoBingo.es through which it offers a broad
portfolio of games including bingo, slots, video bingo and
roulette.
Bingosoft operates on its own gaming platform, which was purpose
built for the Spanish online gaming environment and has developed
and operates a suite of proprietary games.
Strategic and financial rationale for the Acquisition
Rank believes that Spain is an attractive multi-channel market
and that there is significant upside potential in combining Spanish
retail and digital bingo and slot operations.
The acquisition of the YoBingo Group brings Rank immediate and
significant market share, brand recognition and a platform designed
for the Spanish market.
The YoBingo.es brand, proprietary games, bingo engine and
platform will allow Rank to:
1. drive scale and diversify our digital earnings in Spain; and
2. differentiate our offering between the YoBingo and Enracha brands.
YoBingo Group management team
The YoBingo Group was founded by experienced online gaming
executives who have over 15 years' experience previously pioneering
and developing UK online bingo businesses.
In addition to the founders, the YoBingo Group's senior
management team comprises individuals with extensive marketing and
technology experience in the digital gaming market in Spain and
internationally.
All of the senior management will remain with the business
following completion of the Acquisition.
Key terms of the Acquisition
QSB has been acquired by Rank Digital Holdings Limited, a
wholly-owned subsidiary of Rank, on a cash free and debt free basis
from a group of sellers including management, private investors and
a subsidiary of Stride Gaming plc.
The initial tranche of consideration (EUR21 million) was paid on
completion of the Acquisition, less a retained amount which shall
be released 24 months following completion of the Acquisition.
Further consideration will be paid following completion of the
Acquisition equal to the EBITDA of the YoBingo Group for the
12-month period ending 31 December 2018 (subject to certain
adjustments), multiplied by 8.5, less the initial tranche of
consideration.
Further amounts of consideration shall also be paid if specified
tax and commercial outcomes arise following completion of the
Acquisition. The total consideration payable is capped at EUR52
million.
The gross assets of the YoBingo Group as at 31 December 2017
were EUR3.9 million.
Funding of the Acquisition
Rank will fund the consideration from its own cash
resources.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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