Gaming Realms PLC Completion of Transaction with River (7514F)
July 17 2019 - 2:00AM
UK Regulatory
TIDMGMR
RNS Number : 7514F
Gaming Realms PLC
17 July 2019
Gaming Realms plc
("Gaming Realms", the "Company" or the "Group")
Completion of Transaction with River
Further to the announcement on 22 February 2019 (and updates on
18 March 2019 and 28 June 2019) regarding the proposed transaction
to (i) sell the entire issued share capital of Bear Group Limited,
(ii) license the Company's real money gaming platform and (iii)
sell the Company's residual interest in River UK Casino Limited, to
River iGaming plc ("River") (the "Transaction"), the Company is
pleased to confirm that the Transaction has completed.
The cash consideration of the Transaction is GBP11.5m on a
cash-free, debt-free basis. The Company has received an initial
cash sum of GBP7.35m, with a deferred consideration of GBP1.5m due
on or before 31 December 2020. As part of the Transaction, River
has assumed GBP2.65m of liabilities associated with Bear Group
Limited.
The Company will be using part of the funds received to repay
its Barclays Bank overdraft facility, certain creditors, and costs
relating to the Transaction, which together total GBP3.1m. The
Board believes that the remaining GBP4.25m will fund the game
development and licensing division until it is cash positive. The
Company also continues to review options for the sale or
rationalisation of the social publishing division.
The completion of the Transaction finalises Gaming Realms'
withdrawal from the UK real money B2C market as a direct supplier.
The Transaction will reduce headcount by around 50 people and
therefore lead to a very significant reduction in costs and
overheads. It will also allow the simplified Group to focus on the
expanding and higher margin game development and licensing part of
the Company.
The Company acquired the Slingo IP in 2015 with the intention of
using the format to differentiate its offering from other online
gaming operators. Since then, the Company has developed the Slingo
branded games and they have generated an increasing proportion of
the Company's revenue.
The success of its Slingo games encouraged the Company to
establish a standalone licensing division in 2017, and the Board is
pleased with its progress shown by revenues already growing to
GBP2.2m in 2018. It has brand partnerships with international
companies such as Hasbro, Endemol and ITV, and distribution deals
in place with many leading gaming companies. During 2019, the
Company has announced distribution deals with Relax Gaming and
Scientific Games, who are international gaming distribution
companies with around 70 and 200 global partners respectively. The
Board is excited by the potential of these deals, particularly
given the geographical spread they will provide for the Company's
Slingo games. The Company expects the Slingo content to go live on
Relax's platform by September this year and on Scientific Games'
platform during Q4'19.
The US market presents a large opportunity for the Company,
given the changes in regulation which has led to the lifting of
certain gambling restrictions. In addition to its New Jersey
license, where the Company's Slingo content accounts for
approximately 3.5% of online casino turnover in that state, the
Company is applying for a license in Pennsylvania and will also
pursue other opportunities in the US as they arise.
Commenting on the completion, Patrick Southon, CEO, said: "The
completion of the Transaction marks a major step change for the
business and the ability to now focus on creating new gaming
content and licensing, which is delivering much higher margin. With
a number of new licensing agreements in the pipeline and a much
stronger balance sheet, the Company looks forward to updating the
market on further progress in due course."
Enquiries:
Gaming Realms plc 0845 123 3773
Patrick Southon, CEO
Mark Segal, CFO
Peel Hunt LLP (NOMAD & Broker) 020 7418 8900
George Sellar
Guy Pengelley
Yellow Jersey 07747 788 221
Charles Goodwin
Georgia Colkin
Annabel Atkins
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.
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END
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