888 continues small acquisitions strategy

CEO Gigi Levy, It's true that until now we've only acquired bingo companies, but in future we'll make acquisitions in other fields, too.

While the online gaming industry speculates whether PartyGaming plc (LSE: PRTY) will acquire bwin Interactive Entertainment AG (ATX: BWIN), online gaming company 888 Holding plc (LSE:888), controlled by Avi and Aharon Shaked, is pursuing its strategy of small acquisition. The company today announced that it has acquired the Wink Online Bingo business from Daub Ltd. for £11 million in cash, and could rise to £59.7 million depending on Wink's performance through March 2011.

This is 888's second-ever acquisition, and both acquisitions are in bingo. In March 2007, the company acquired the Bingo business of Globalcom Ltd. for $43.4 million. Bingo is considered an important growth engine for the online gaming industry, in addition to more tradition pursuits of online poker, roulette, and other casino offerings.

888 CEO Gigi Levy told "Globes", "It's true that until now we've only acquired bingo companies, but in future we'll make acquisitions in other fields, too."

888 said that Wink Bingo made a pretax profit of £1.3 million on £15 million revenue in January-November 2008, giving a fairly low profit margin of about 9%.

Levy added that Wink Bingo began operating just two years ago, and that its profit margins were affected by substantial investment in marketing. "The company now has very rapid growth," he said.

888 also reiterated its guidance for the year.

888's share rose 0.7% by midday in London to ₤1.12, giving a market cap of ₤389 million.

Published by Globes [online], Israel business news - www.globes-online.com - on December 22, 2009

© Copyright of Globes Publisher Itonut (1983) Ltd. 2009

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