UK-based software firm World Gaming has revealed plans to acquire a ‘medium-sized’ sportsbook, following its successful listing on the London stock Exchange's Alternative Investment Market (AIM).
The company, which is also traded on the Nasdaq OTC exchange, listed on AIM on Monday at a market capitalisation of £19.2m, raising £2.5m.
The firm already has access to around US$15m of cash as a result of a 2004 deal that saw its largest client Sportingbet become a joint venture partner in World Gaming's software subsidiary in return for US$13m in staged payments.
And Daniel Moran, chief executive, said it would look to use this capital to fund an acquisition drive.
“We will continue to license software, but we also believe we should look at acquisitions, and an obvious target for us would be an operator.
“If we can buy and operator and put then on our software then it makes the best use of our assets.”
Moran said the institutions would be willing to provide it with further capital to fund a major acquisition.
And he added the most likely target for the firm is a mid-size sportsbook and casino operator.
“A lot of these companies are looking for exit strategies, so why not come to a UK-listed company,” Moran said.
“Sportingbet is already doing that, but it is looking at large-scale acquisitions and nobody is considering the small- to medium-size guys.”
World Gaming recorded an operating profit of US$5m for 2004 from a turnover of US$16.2m, but Moran said the acquisition would be crucial to future proof the firm.
“If you look at bigger companies they are taking over their software or cutting fixed rate deals.
“The operators and software companies are converging, and perhaps five years down the track companies aren’t going to be handing over royalty payments to software firms.”
source : egr magazine
