TIDMGMR
RNS Number : 8092S
Gaming Realms PLC
27 June 2018
27 June 2018
The information contained within this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulation (EU) No. 596/2014. Upon the publication of this
announcement, this inside information is now considered to be in
the public domain.
Gaming Realms plc
("Gaming Realms" or the "Company" or, together with its
subsidiaries, the "Group")
Proposed sale of UK Real Money Casino brands and business
and
Notice of General Meeting
Gaming Realms plc (GMR.L), the developer, publisher and licensor
of mobile real money and social games, announces that the Company
has entered into an agreement, conditional upon shareholder
approval, to sell a 70% stake in most of its UK online casino B2C
business to River UK Casino Limited ("River UK Casino", a
subsidiary of River iGaming plc, a company listed on the Merkur
Market of the Oslo Bors ("River iGaming")) for a total cash
consideration of up to GBP23.1 million (the "Transaction").
Transaction highlights:
-- River UK Casino is a newly incorporated company, established by River iGaming plc to acquire
certain of the Company's UK online casino B2C brands, being
Pocket Fruity, Spin Genie, Britain's Got Talent Games, X Factor
Games and associated business (the "Business")
-- Following the completion of the Transaction, River iGaming
will hold 70% of the issued share capital of River UK Casino, with
Gaming Realms holding the remaining 30%
-- River UK Casino has entered into a five year B2B platform and
content agreement with the Company on normal commercial terms,
which Gaming Realms expects to generate approximately GBP1 million
of annual revenue for the Group
-- The total consideration payable in cash to the Company for
70% of the Business will be up to GBP23.1 million, comprising:
o a minimum payment of GBP8.4 million (of which GBP4.2 million
is payable on completion and GBP4.2 million payable concurrently
with the earnout payment); and
o a further maximum cash payment of GBP14.7 million on an
earn-out basis , payable no later than 31 August 2019 (based on 70%
of 5.5 times River UK Casino's EBIT for the 12 months to 30 June
2019 minus the GBP8.4 million minimum payment)
-- For the year ended 31 December 2017, the Business delivered
GBP13.9 million of net gaming revenue and adjusted profit before
tax and interest (but after central costs) of GBP2.2 million, which
the Company's directors (the "Directors" or the "Board") believe
will be significantly higher for the 12 months to 30 June 2019. In
order to deliver the maximum earn-out for Gaming Realms, the
Business would need to generate EBIT of GBP6 million in the 12
months to 30 June 2019
-- Gaming Realms' retained interest in River UK Casino is
subject to a mutual put and call option arrangement which can be
exercised no later than 31 October 2020 (based on an uncapped
valuation of 5.5 times River UK Casino's EBIT for the 12 months to
30 June 2020)
-- River iGaming and the Company will jointly provide a working
capital loan facility of GBP3 million (GBP2.1 million from River
iGaming and GBP0.9 million from the Company) to River UK Casino to
fund investment in marketing for the Business until at least 30
June 2019 repayable no later than 30 June 2020
-- The current management team of the Business will run River UK
Casino until at least 30 June 2020
-- The Group will retain Slingo.com and the Slingo brands
Strategic rationale
-- The sale is in line with the Company's strategy of focusing
its resources on international licensing and content development
and will pivot the Group to a B2B business, with the revenue
generated from River UK Casino becoming a significant source of
income for the Group's B2B platform
-- This decision to focus on licensing has shown early success
and the Board believes this will provide the Company with longer
term, consistent higher margin revenues. The recent agreements
signed with major gaming and media companies illustrate the
creativity of the Company's content
-- Further, with the reduction in funding the B2C business
(principally, staff and advertising costs), in the longer term this
pivot to a B2B business is expected to result in improved
margins
-- The Board intends to use the first GBP4.2 million of sale
proceeds for the continued development of new gaming content and
platform enhancements, as well as providing a loan of GBP0.9
million to fund River UK Casino's marketing budget as set out
above. The Board will be reviewing options for the balance of the
proceeds above the first GBP4.2 million including returning cash to
shareholders
Commenting on the proposed sale, Patrick Southon, CEO of Gaming
Realms, said:
"We are delighted to announce this agreement with River iGaming.
We believe that this sale will be transformational for Gaming
Realms as it will enable us to focus more of our resources on
international licensing and the development of new gaming content,
placing us in a stronger position to drive further profitable
growth in the future."
Notice of General Meeting
The sale is conditional on receiving certain third party
consents and the passing of a resolution (the "Resolution") to be
proposed at a general meeting to be held at 11.00 a.m. on
Wednesday, 18 July 2018 at the offices of Memery Crystal LLP, 165
Fleet St, London EC4A 2DY (the "General Meeting").
A circular, which will provide further details of the proposed
sale, will be sent to shareholders and be available on the
Company's website on or before Monday, 2 July 2018.
Intentions to vote in favour
The Directors have irrevocably agreed to vote in favour of the
resolution to be proposed at the General Meeting in respect of
their own beneficial holdings. The Board has also received letters
of intent or irrevocable commitments to vote in favour of the
resolution from certain other Shareholders.
Details are as follows:
Number of Ordinary Percentage of
Shares Current Issued
Share Capital
Letters of intent 35,534,697 12.5%
------------------- ----------------
Board Irrevocable commitments 48,734,052 17.1%
------------------- ----------------
Other Irrevocable commitments 40,145,046 14.1%
------------------- ----------------
Total 124,413,795 43.7%
------------------- ----------------
As at 26 June 2018 (being the latest practicable date prior to
the publication of this notice), 284,428,747 ordinary shares in the
Company ("Ordinary Shares") were in issue (no Ordinary Shares were
held in treasury). Accordingly, the total number of voting rights
of the Company as at 26 June 2018 was 284,428,747.
Enquiries:
Gaming Realms plc 0845 123 3773
Patrick Southon, CEO
Mark Segal, CFO
Akur Limited (Financial Adviser) 020 7493 3631
David Shapton
Matthew Smith
Alexander Bergqvist
Peel Hunt LLP (Nominated Adviser and
Broker) 020 7418 8900
Dan Webster
George Sellar
Nicole McDougall
Yellow Jersey (PR Adviser) 07747 788 221
Charles Goodwin
Georgia Colkin
Abena Affum
About Gaming Realms
Gaming Realms creates and publishes innovative real money and
social games for mobile, with operations in the UK, U.S. and
Canada. Through its market leading mobile platform and unique IP
and brands, Gaming Realms is bringing together media, entertainment
and gaming assets in new game formats. The Gaming Realms management
team includes accomplished entrepreneurs and experienced executives
from a wide range of leading gaming and media companies.
Disclaimer
The Transaction described in this document is conditional on
receiving certain third party consents and the Resolution being
passed by shareholders at the General Meeting to be held at 11.00
a.m. on Wednesday, 18 July 2018 at the offices of Memery Crystal
LLP, 165 Fleet St, London EC4A 2DY for the purpose of considering
and, if thought fit, passing the Resolution.
Akur Limited ("Akur"), which is authorised and regulated in the
United Kingdom by the Financial Conduct Authority ("FCA"), is
acting exclusively for the Company and for no-one else in
connection with the matters set out in this announcement. Akur will
not regard any other person (whether or not a recipient of this
announcement) as its client in relation to the Transaction and will
not be responsible to anyone other than the Company for providing
the protections afforded to its clients or for providing advice in
relation to the Transaction or any transaction or arrangement
referred to in this announcement.
Peel Hunt LLP ("Peel Hunt"), which is authorised and regulated
in the United Kingdom by the FCA, is acting exclusively for the
Company and for no one else in relation to the matters set out in
this announcement. Peel Hunt will not regard any other person
(whether or not a recipient of this announcement) as its client in
relation to the Transaction and will not be responsible to anyone
other than the Company for providing the protections afforded to
its clients or for providing any advice in relation to the
Transaction or any transaction or arrangement referred to in this
announcement.
Apart from the responsibilities and liabilities, if any, which
may be imposed on Akur or Peel Hunt by FSMA or the regulatory
regime established thereunder, neither Akur nor Peel Hunt makes any
representation express or implied in relation to, or accepts any
responsibility whatsoever for, the contents of this announcement or
any other statement made or purported to be made by it or on its
behalf in connection with the Transaction. Both Akur and Peel Hunt
(and their affiliates) accordingly, to the fullest extent
permissible by law, disclaim all and any responsibility or
liability (save for any statutory liability) whether arising in
tort, contract or otherwise which it might have in respect of the
contents of this announcement or any other statement made or
purported to be made by it or on its behalf in connection with the
Transaction.
This document does not constitute an offer or constitute any
part of an offer to the public within the meaning of sections 85
and 102B of FSMA, the Companies Act 2006 or otherwise. Accordingly,
this announcement does not constitute a prospectus under the
prospectus rules published by the FCA and has not been and will not
be approved by or filed with the FCA or approved or filed with any
other authority which could be a competent authority for the
purposes of the Prospectus Directive.
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
MSCSEAFIWFASESM
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June 27, 2018 11:10 ET (15:10 GMT)
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