Game on for NetPlay TV
Article Date: May 12 2009AIM-traded gaming company NetPlay TV Plc has taken over the production of the “Challenge Jackpot” brand, including its associated website and television channel, which is broadcast on Virgin Media and Sky.
The all-share deal, worth £2 million, is principally motivated by the transfer of 16,000 regular customers from Two Way Gaming, a joint venture between Two Way Media and Win Gaming Media.
The corporate rationale behind the deal is to broaden NetPlay’s customer base and demographic reach in one fell swoop.
In March, NetPlay, which operates several interactive gaming services under a UK gaming licence, generated £14.5 million of bets, with a gross margin of £500,000. The addition of Two Way Gaming’s revenue is expected to take the company’s gross bets to more than £45 million a month.
NetPlay has raised £800,000 at 18p per share in a small placing aimed at funding transaction-related expenses and Challenge Jackpot’s integration costs. Martin Higginson, CEO of Netplay, Andrew Lapping, non-executive director of NetPlay, and some existing institutional shareholders in the company took part in the private placing.
Adding to the complexities of the deal, Virgin Media Television has entered into an option agreement of around 10 per cent in NetPlay, calculated after the share issue.
Higginson said: “We are extremely pleased to be entering into this arrangement with Virgin Media Television. The combination of the established Challenge Jackpot brand with our vision for converged gaming solutions will be a powerful force. From our perspective, it allows us to offer gaming services to a new set of customers, thus broadening our demographic reach considerably.
“Over the past 12 months, NetPlay TV has made a lot of progress. We have moved from the losses incurred during our first year of establishing the business in its current guise to a solid, sustainable and profitable business.”
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