June 22, 2009

Party's Cashcade buy could be as soon as next week

Foxy Bingo parent company Cashcade’s acquisition by PartyGaming is likely to go through “sooner rather than later”, according to sources close to the deal.

“The acquisition could be driven through as early as next week. Although takeovers can be complex and there are many supplier and technology issues such as player migration to finalise in this particular deal,” one source said.

PartyGaming stated that it would be able to access capital once it had settled with the US authorities over its business activities in the US prior to the passage of the Unlawful Internet Gambling Enforcement Act (UIEGA) in 2006, and that the Cashcade buy out would be one of series of consolidatory moves in the sector.

The value of the buyout will be between £70m and £100m. Payment is likely to be in cash, with Cashcade shareholder Independent News and Media looking to raise funds to repay outstanding debts for its 20% stake.

Cashcade is heavily focused on the highly competitive UK market, but Party will use Cashcade’s marketing expertise and technology on a white label basis and provide online bingo solutions to clients including Cirsa and Intralot. Such a move would also enable Cashcade to diversify its player base and prevent over reliance on the UK market.

The deal is a blow to 888, as Cashcade is one of its key licensees on 888’s Globalcom platform. 888 had previously denied being in “advanced talks” with the Foxy Bingo owner (more).

The deal also represents another challenge to the UK’s leading bingo site, Gala Bingo, as Party is likely to ramp up its marketing to increase the firm’s UK market share.

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