Party Gaming bought the company Cashcade, the parent company of Foxybingo uk, Think Bingo, Bingo Scotland, Cheeky Bingo and Little Big Bingo. Cashcade, except from the bingo sites, operates also casino sites like Get Minted and Foxy Flutter.
The upfront that Party Gaming will pay for this purchase comes up to £71.9 million while Party Gaming will pay in addition, earn out payments comming up to £24 million depending on the company’s future evolvement and profit.
Taking into consideration the profit of Cashcade th previous year, £12.2 million, then Party Gaming paid a multiple of 5.9 times EBITDA (earnings before tax, depreciation and amortisation) and this payment will reach the 7.78 multiple in addition with the future payments.
Patrick Southon, Cashcade’s Managing Director, said that Cashcade was delighted to join the PartyGaming organisation, it was about a substantial opportunity to reorganise their existing business by being part of the world’s leading online gaming company.”
The responsibles are very satisfied by these purchase as we can understand by their announcements. Jim Ryan, PartyGaming’s Chief Executive Officer, said that Cashcade constituted an excellent platform to create an important share of $1.5 billion global online bingo market. As Jim Ryan said their objective was to acquire companies that could help them being into a top three position in each of our four product verticals and deliver substantial revenue and cost synergies and their longer-term strategic objective was to lead the market in online poker, casino, sports and bingo.”
Cashcade management announced that the earn out period would be over 18 months, if the company was able to accomplish its internal targets; although Bingo News prove that the company is on target for the current year and the profit in 2009 will be over £15 million.