Shuffle Master nixes acquisition of Ongame Network
June 28, 2012
Shuffle Master has decided not to proceed with a previously announced acquisition of Ongame Network Limited, citing uncertain market conditions in Europe and the lack of progress in U.S. online poker legalization.
“We remain ardent believers in the growth opportunities for online gaming and continue to focus intensely on the space,” said Shuffle Master CEO Gavin Isaacs. “When we signed the definitive agreement in February, we believed that general market conditions and Ongame's sales pipeline supported the purchase being neutral or modestly accretive to the company's EBITDA. Business conditions in Europe have deteriorated since February and as a result, it has become evident to us that Ongame's operations post acquisition will not achieve the near-term results we initially expected and will require a larger ongoing investment than anticipated.
“Although we believe in its eventuality, there is also uncertainty surrounding the timing of legalization and the rollout of online poker in the U.S. at both the state and federal levels," Isaacs added. “Although we are disappointed in the outcome, after thorough due diligence we believe this is the right thing to do for our company and our shareholders. We will continue to pursue opportunities to achieve our growth objectives in the online space, including leveraging and protecting our strong intellectual property and brands, and will investigate all prospects—both organic and acquisitive—that make strategic and financial sense."
Shuffle Master's near‐term focus will be to continue to strengthen and grow its core operations, improve upon execution and invest in its business and ongoing growth initiatives.
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