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Pokeroom.com Founders Set To Make Their Fortune
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BETandWin (BWIN), the online sportsbook giant from Austria, looks set to purchase Ongame, the operator of Pokeroom.com. The deal, which is expected to go through soon, will reward the Swedish founders of the world's third largest poker room to the tune of 473 million Euro. BETandWin will pay 45% of the amount in cold hard cash, with 40% financed with shares in the sports betting company, and the remaining 15% due in 2009.
BWIN trades on the Austrian stock exchange and the company has experienced phenomenal growth in recent years. However, they are looking to branch out into the lucrative North American market and they will be able to leverage Pokerroom.com's members, who are predominantly from the US and Canada, for this purpose.
Pokeroom.com has six million registered users. It trails only PokerStars.com and PartyPoker.com in terms of size, but is rapidly gaining in market share thanks to excellent online marketing and SEO expertise.
BWIN agreed to pay an earnings multiple of 5.37, which does not seem excessive at all. The deal is contingent on Ongame's reaching net revenues of 88.19 million Euro, at the minimum, as well as earnings of at least 473.6 million Euro before depreciation, taxation and amortisation. Pokeroom.com expects revenues of that amount for 2005.
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