Bwin Paying Over $72 Million For Gioco Digitale

Leading online betting and gaming provider Bwin Interactive Entertainment AG has announced that its purchase of Italy’s Gioco Digitale SpA will cost it over $72 million.

Bwin revealed its intention to purchase Gioco Digitale last week, making the Austrian firm a major player overnight in the expanding Italian market.

Gioco Digitale markets itself as Italy's original independent online gaming site and offers poker, betting and skill games. The recently agreed deal will see its stockholders contribute 752,474 shares, which works out to 56.3 percent of the firm, in exchange for 2.3 million Bwin shares.

Bwin will acquire the remaining 43.7 percent of Gioco Digitale’s share capital for $36.4 million following the share swap. In addition, it will contribute a further $29.1 million towards the transaction following the presentation of Gioco Digitale´s audited accounts for 2009.

Finally, Bwin is scheduled to pay a final $7.2 million in cash 18 months after the deal closes. However, this portion of the agreement is subject to Gioco Digitale achieving certain financial performance targets for 2009.

“Gioco Digitale ideally positions Bwin to take advantage of the opportunities offered by the booming Italian online gaming market, which is sustained by modern, pro-active regulation,” said Norbert Teufelberger, Co-Chief Executive Officer for Bwin.

“Besides, Carlo Gualandri will also be joining our corporate management team, allowing us to draw on his extensive entrepreneurial experience in developing and introducing new, innovative product lines in well regulated markets.”

Gioco Digitale recently reported generating total income of $29.2 million for the first half of 2009 while Bwin stated that it would be financing the acquisition on a cash and debt-free basis. Italy’s online gaming market is growing at a projected compound annual rate of 32 percent and is expected to yield $1.7 billion in gross gaming revenues by 2012.