Gaming Realms has moved to sell its real-money business to focus on content development and licensing
UK gaming company Gaming Realms has agreed to sell its real-money gaming business to Oslo-listed River iGaming for a total consideration of £11.5 million, news emerged today.
Under the terms of the transaction, which still needs regulatory and shareholder approval, River iGaming will acquire Bear Group, Gaming Realms’ real money gaming operation. The Oslo-listed gaming company will also take over Gaming Realms’ 30% residual stake in River UK Casino. River iGaming bought an initial 70% stake in River UK Casino last June.
The two companies said that the total cash consideration for all related transactions will amount to £11.5 million, including the settlement of the £4.2 million contracted deferred consideration owed by River UK Casino to Gaming Realms, due in October 2020.
The UK gaming group said today that the sale was in line with its strategy to focus its attention on the development of new gaming titles and international licensing of its flagship Slingo brand. Gaming Realms recorded licensing revenue of £1.8 million in 2018, up three times from the prior year.
Gaming Realms said that Bear Group generated revenue of £8.8 million and delivered adjusted EBITDA of £0.5 million for the 12 months ended December 31, 2017.
Focus on Content Development and Slingo Licensing
Gaming Realms revealed today that it would use proceeds from the sale to boost its development and licensing business and to repay its £3.5 million loan extended by JPJ Group Plc.
Commenting on the deal, group CEO Patrick Southon said that the new regulatory environment in the United Kingdom, paired with the increased Point of Consumption tax, has “made it increasingly difficult to operate a sole UK-facing casino and real-money platform.” The executive went on to say that the acquisition of the Slingo brand and intellectual property in 2015 has enabled his company to “become a highly regarded developer and licensor of games in the international gaming market.”
Gaming Realms penned earlier this year a three-year deal with Scientific Games Digital to develop the Slingo MONOPOLY game. Under the terms of the deal, Gaming Realms will develop and publish the game across its Slingo B2B and B2C channels and through its distribution operators channel and third-party websites.
The gaming group expects to cut costs amounting to £3 million following the sale of its real-money business. The transaction is subject to approval from the shareholders of both Gaming Realms and River iGaming as well as from the UK Gambling Commission and the Alderney Gambling Control Commission, and is expected to be completed in the second quarter of the year.
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