PartyGaming snaps up bingo operator

Online gaming titan PartyGaming has beefed up its bingo offering with the acquisition of Cashcade, owner of some of the UK’s leading bingo web sites.PartyGaming is initially paying £71.9m in cash for Cashcade, with a possible further £24m due depending on the future profit performance of Cashcade.Cashcade owns the Foxy Bingo, Think Bingo and Bingo Scotland web sites as well as casino sites such as GetMinted and Foxy Flutter.In 2008 the company had net revenue of £44.9m, up from £28.5m the year before. Earnings before interest, tax, depreciation and amortisation totalled £12.2m, up from £4.9m the year before, giving an implied earnings multiple of 5.9 based on the acquisition price.The acquisition is expected to be earnings enhancing, pre-amortisation of intangibles, in the current year.“Cashcade provides us with an excellent platform to build a meaningful share of the $1.5 billion global online bingo market. Our M&A [mergers & acquisitions] objective is to acquire companies that can put us into a top three position in each of our four product verticals and deliver substantial revenue and cost synergies,” said Jim Ryan, chief executive officer of PartyGaming.