Proactive Investors - Run By Investors For Investors

Playtech snaps up online bingo developer Virtue Fusion for £29 million

Playtech snaps up online bingo developer Virtue Fusion for £29 million

Gaming software specialist Playtech (LSE: PTEC) is acquiring Virtue Fusion, a developer and licensor of online bingo products, for an initial consideration of £29 million in cash, and potentially £36 million depending on the EBIT performance of Virtue Fusion in 2010.


The acquisition appears to have clear rationale for Playtech, which said the transaction would transform it into a leader in bingo market, complementing its position in poker and casino. The acquisition is also expected to be earnings accretive in 2010, and generate “additional cross-selling opportunities”.


In 2009, Virtue Fusion generated revenues of £12.3 million and adjusted EBITDA of £3.8 million, compared to revenues of £8.1 million and adjusted EBITDA of £2.3 million in 2008. Playtech is clearly paying a premium to gain a strong foothold in the Bingo sector, which according to the company, was one of the fastest growing online gaming segments in 2009.


Virtue Fusion has (during peak traffic) more than 6,000 concurrent players in the United Kingdom, and also licences its products to more than 20 other groups, including Paddy Power, Vigrin and William Hill.


“For Playtech, the acquisition significantly enhances its own bingo offering, brings new licensees and enhances its relationships with a number of existing licensees. It also positions Playtech as the leading supplier in all of the key product segments in the online gaming industry, with very substantial liquidity in each of its player networks,” Playtech stated this morning.


“As with poker, network player liquidity is an important element for bingo operators.  By linking the operator's bingo rooms across the network, Virtue Fusion can facilitate more frequent games being offered and higher prize values and jackpots for the same individual stake. Both Playtech and Virtue Fusion's existing licensees will therefore enjoy the benefits of increased liquidity when their networks are combined.”

View full PTEC profile View Profile

Playtech PLC Timeline

Related Articles

US dollars
Mon
The growing company’s share price gained 90% last week on news of the cash injection.
Procurement services cogs
October 04 2018
Revenues in the latest half-year rocketed 254.5% to £596,000, more than the entirety of 2017
Apps on a smartphone
December 17 2018
“While this year our focus has very much been about developing our product, in the coming year the primary objective will be to increase revenues and margins,” chief executive Philip Marcella said

© Proactive Investors 2019

Proactive Investors Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use