Intertain revealed that it has entered into a non-binding letter of intent to acquire Vera&John parent company Dumarca Holdings Limited using €44.5 million in cash and €36.5 million in common shares. The earn out period requires Vera&John to generate EBITDA over €10.1m in both 2015 and 2016
The cumulative Earn Out payment over 2015 and 2016 is subject to a cap of €8.1 million. Based on current run-rate results, the company expects to make the full Earn Out payment.
John Kennedy FitzGerald, CEO of Intertain, explained the rationale behind the deal: “Vera&John provides immediate accretion and meaningful operating cash flow to our business and gives us access to the growing Nordic markets. Furthermore, Vera&John has developed and owns a fully-integrated, proprietary software offering, giving us future flexibility with respect to our business. Vera&John also has a mobile platform, including a leading mobile casino, with 35% of their expected 2014 sales being generated through this growing medium.”
Dumarca Holdings director Dan Anderson added: “We are very excited about this transaction and feel both parties bring excellent value going forward. We reviewed alternatives to this deal and felt Intertain was the best partner, given their aligned interest and exciting growth prospects. We are committed to this partnership as shown in our material ownership in Intertain going forward.”
Vera&John will give Intertain a fully-integrated global online casino, operating in 11 countries with three core brands: Vera&John, Vera&Juan and Vera&John Social. Vera&John generates approximately 75% of its sales from the Nordic region, which will give Intertain access to a growing and large market.
The acquisition is subject to completion of satisfactory due diligence and negotiation and settlement of definitive documentation, which is expected to be completed in December 2014, as well as regulatory approvals.