Saturday, July 25, 2009

PartyGaming to focus on mainland Europe - 23rd July 2009

PartyGaming aims to focus on continental European as it rolls out Cashcade and Party bingo brands alongside more white-label deals, the company has advised.

PartyGaming has acquired Cashcade for £71.9m, with an additional payment of up to £24m dependent on performance.

To grow its share in rapidly rising global online bingo market, PartyGaming will look to B2B deals such as those recently inked with Italian land-based lottery services provider Intralot and Cirsa, which just happen to be the largest land-based bingo operator in Spain.

A PartyGaming spokesperson said "expect us to do more B2B deals" to take a slice of the global online bingo market, which is set to grow from US$1.5bn to US$2.8bn by the end of 2012, according to industry data business H2 Gambling Capital.

"Europe is the exciting area for us. Cashcade will be helping us build the PartyGaming platform while continuing to building their own brand, but we will also be looking to build market share through more B2B deals following those with Intralot, Cirsa, DM and Channel 5".

"Cashcade has recently grown its share of the UK market to 23%, so they’re really at the top of their game in terms of taking share from other competitors".

PartyGaming advises it has the necessary access to the cash and debt markets required to play a role in the unfolding consolidation play, following its recent settlement with the US DOJ. Party had £193.1m cash on the balance sheet at of 31 December 2008. The £95.9m total consideration for Cashcade and the settlement of £72m to the US DOJ will however be met from this.

PartyGaming finance director Martin Weigold advised in a conference call to journalists that the company had already been engaged in "extensive discussions" with banks in relation to raising funds for further M&A activity.

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