An innovative gaming Plc – sold for three
times the acquisition cost in 54 weeks.
This was a business concept looking to purchase
and consolidate a number of assets in the internet
gaming industry.
Work was undertaken to build a tax efficient
corporate structure which also “fire-walled”
its key intended assets.
Due diligence was undertaken on the acquisition
targets and a city brokerage firm engaged to sponsor
an IPO. An exclusivity arrangement was entered
into with a key acquisition target – Gamebookers,
an European facing sports-book.
A pathfinder prospectus, together with a detailed
financial model was prepared.
Conditions in the AIM IPO market worsened just
at the time the pathfinder prospectus was about
to be released. As the clock was ticking on the
exclusivity arrangement, and had only one month
to go before completion, alternative sources of
capital were sought and both Private Equity firms
and Hedge Funds were looked at to provide capital.
The robustness and the clarity of the financial
model together with the grasp of the business
and the opportunities for turnaround helped secure
funding and completion within less than four weeks
from start to finish.
With a future eye on flotation or trade sale,
and now control of the business, work was undertaken
to provide a “PLC” set of controls,
management information, and to regularise Intellectual
Property and contractual arrangements. Further
preparation was made for an IPO in both London
(AIM) and Canada (TSX).
54 weeks after acquisition, the business was
sold for THREE TIMES its acquisition cost to the
(then) FTSE100 company, PartyGaming PLC for €105m.
The state of readiness of the business allowed
for a speedy due diligence and completion process,
vital, since conditions in the gaming industry
deteriorated rapidly and might have prevented
the realisation of the sale.
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