End of Year Business DealsPublished December 31, 2006 by OCR Editor
The world's biggest poker company, PartyGaming of the UK, is buying two rival companies for $66.3 million in shares. The two operations are Empire Online and Intercontinental Online Gaming. The end of year deal comes after shares have lost a large part of
Consultants and analysts believe that such deals, purchases and acquisitions are believed to be the key to increasing the number of players who join and play online. With the loss in stock value and the loss of the American gambling crows both companies bought in the deal do not accept bets from the United States adding sites can add a lot to revenue. PartyGaming forecasts a rise in earnings due to the purchase of $8.5 million as early as next year.
PartyGaming is based in Gibraltar. In 2006 it had added sports betting to its games. It relied heavily on the American market for its operations and now must accommodate with the new reality. The acquisition will add to it some marketing and operational experience and knowledge of the European and international market. "These deals bring good secondary brands, new revenue streams and strong management with proven marketing skills, especially in casino," said a PartyGaming spokesman.
The larger of the two companies purchased, Empire Online, plans to become an investment company and invest in other businesses, not related to gambling. Besides the profits from selling, the company has about $250 million in cash from its operations. The buyer, meanwhile, seems to be heading towards additional deals in 2007. possibly targeted will be software companies. The industry is heading to consolidation.