TTR.L Regulatory News (TTR)

2 Jun 2006 07:30

32Red Plc02 June 2006 32Red Plc("32Red" or the "Company") Acquisition of the Bet Direct business ("Bet Direct") from Sportech PLC (the "Acquisition") Placing by Numis Securities of 5,010,500 ordinary shares of 0.2p each at 120pper share (the "Placing") 32Red announces the acquisition of Bet Direct, one of the largest independenttelephone and internet betting businesses in the UK, for £12.5 million, togetherwith a Placing to raise approximately £6.0 million. Key Points: • The consideration payable by 32Red in connection with the Acquisition is £12.5 million in cash, less Bet Direct's customer balances liability of approximately £1.5 million. • Bet Direct offers telephone, internet, interactive television and mobile telephone sports betting as well as internet casino, poker and fixed odds games. It has approximately 440,000 registered customers, of whom 82,000 were active in sportsbook and 11,000 in casino and poker in 2005. • As well as this strong database of customers, the Board of 32Red believes that Bet Direct's key strengths include: o Existing sportsbook infrastructure, notably employees, software and content feeds; o Awareness of the Bet Direct brand and the strength of its marketing and affiliate agreements. • In the year to 31 December 2005, Bet Direct achieved gross win of approximately £8 million from turnover of approximately £143 million and an operating loss of approximately £4.8 million. As at 31 December 2005, Bet Direct had net liabilities (excluding customer balances) of approximately £0.2 million. • Following the acquisition of Bet Direct, the Company expects as part of its integration plans to make net savings of £2.7 million in the year to 31 December 2007, compared to Bet Direct's current budget. Management anticipates completing the full integration of the two businesses by the third quarter of 2007. • Based upon the Directors' current expectations, the Acquisition is expected to be earnings enhancing in the year to 31 December 2007. • 32Red's trading overall for the year to date remains broadly in line with the Board's expectations. Poker has been softer than expected reflecting in part certain industry- wide factors. Casino generally has been in-line and new player recruitment on both poker and casino continues to please. The Board remains confident of the result for 2006. • The Placing of 5,010,500 new ordinary shares with certain institutional investors at a price of 120p per ordinary share is intended to raise £6,012,600 before expenses to help fund the Acquisition. The balance of the consideration will be funded from new bank facilities and existing cash reserves. Ed Ware, Chief Executive of 32Red, said "The acquisition of Bet Direct fits the strategic objectives of 32Red extremelywell providing a much enlarged customer database and the ability to offer thefull portfolio of betting and gaming products through a variety of distributionchannels. Our combined UK focus has enabled both management teams to identifyareas of marketing cross-over, areas for review and customer recruitment andretention opportunities. We welcome the staff and management of Bet Direct to the Group and look forwardto an exciting period of growth and development." Further information: Enquiries: 32Red Plc Tel: 00 35 049 396 Ed Ware, CEO Ed Andrewes, Development Director Simon Dimmer, Finance Director Numis Securities Limited Tel: 020 7776 1500 Andrew Dawber Chris Wilkinson College Hill Associates Tel: 020 7457 2020 Matthew Smallwood The Placing has been arranged and underwritten by Numis Securities Limited andis conditional on the admission of the new shares to trading on AIM. The newshares will rank pari passu in all respects with the existing ordinary shares of0.2p each in issue. It is expected that dealings in the new shares will commenceon AIM on 7 June 2006. This information is provided by RNS The company news service from the London Stock Exchange