CONTAGIOUS GAMING PROVIDES UPDATE ON DIGITOTE ACQUISITION
VANCOUVER, B.C., August 10, 2015 – Contagious Gaming Inc. (TSX-V: CNS) (“Contagious Gaming” or the “Company”) is pleased to provide an update on the previously announced acquisition of Digitote Limited and Digitote Software GmbH Deutschland (together “Digitote”) (the “Acquisition”). Digitote is a business-to-business (“b2b”) sports betting platform provider which currently manages the sportsbook operations for a number of large and mid-sized customers in multiple regulated jurisdictions. Its proprietary software platform “Xturf Server System” manages betting operations seamlessly across multiple channels including betting shops, internet, mobile, self-service machines and special hospitality capture and recognition systems. It also provides end-users with a “shared wallet” for cross-betting (Shop/ Internet/ Machines) and readily supports integration of 3 rd Party products. Digitote’s XTurf Server System software has a 30-year history as an extremely robust sports betting platform with a proven track record of handling over $10-billion of Web, mobile and land-based wagers throughout Europe.
On May 21, 2015 Contagious Gaming announced that it has entered into a Letter of Intent (“LOI”) to acquire Digitote. The purchase price for Digitote was disclosed at €5,000,000 and was to be paid through a combination of common shares of Contagious Gaming, cash and a vendor take-back note (“VTB”). Digitote is expected to generate approximately $1.4mm in Normalized EBITDA.
Since the execution of the LOI, Contagious Gaming has been actively engaged in business, financial and legal due diligence. All aspects of due diligence has been progressing well. Under the terms of the LOI, a definitive agreement was to be entered into by July 31, 2015. Contagious Gaming has entered into an amendment to the LOI which extends the definitive agreement execution date to September 15, 2015. Contagious Gaming expects to be in a position to execute the definitive agreement before August 31, 2015 with a final closing shortly thereafter.
Purchase Price Consideration
The agreed upon purchase price as per the LOI is €5,000,000 ($7,150,000). The purchase price will be satisfied with common shares of Contagious Gaming and a VTB. No cash consideration will be paid on closing to fund the acquisition. The specifics of the consideration to be paid on closing is as follows:
- 8,008,000 common shares of Contagious at a deemed price of $0.50 for common stock consideration of €2,800,000 ($4,004,000);
- €2,200,000 ($3,146,000) in a VTB payable on the earlier of: i) 18 months from closing of the Acquisition; and ii) an equity offering by Contagious for gross proceeds of at least $5 million. The VTB will bear 0% interest for the term.
Peter Glancy, CEO and Director of the Company, commented: “We are pleased to announce that we have made significant progress in the completion of due diligence and look forward to closing the Digitote Acquisition. The Acquisition and the consideration paid is structured to deliver maximum shareholdervalue and align all stakeholders.” He added “The Acquisition of Digitote will add significant value to Contagious Gaming’s sports betting offering with the ability to provide our customers with a multi-channel live in-play and pre-match fixed odd sports betting platform alongside our proprietary in-play pari-mutuel Goal Time offering.”
Note: all Euro to CAD$ translated at a FX rate of 1.43:1.
Digitote is a developer and provider of commercial-grade sports betting and horse racing technology, hardware, and support services to operators across Europe. Its b2b software platform (“Xturf”) currently manages the sportsbook operations for a number of large and mid-sized customers in multiple regulated jurisdictions. Digitote’s team are highly experienced technical and industry professionals focused on the continued delivery of cutting edge sports betting solutions.
The Xturf platform is eCOGRA certified and offers sportsbook operators a central system and interface to control all of their betting activities. Key functions include:
- Multi-channel management for interactive (web, mobile) and land-based (retail and self-service terminals) operations
- Multi-channel player wallet
- Automatic odds adjustments and risk management capabilities
- Scanning and recognition of tickets, betting slips and customer cards
- Multi-language and multi-currency capabilities
- 24/7 customer and technical support infrastructure
The Xturf software has the capabilities to offer significant coverage of sports/events including:
- 30,000 unique events per month;
- 18,000+ live bets (in-running betting) offered weekly;
- 200 live bets offered simultaneously; and
- Up to 200+ betting types per event.
The following non-IFRS definitions are used in this news release because management believes that they provide useful information regarding our ongoing operations. Readers are cautioned that the definitions are not recognized measures under IFRS, do not have standardized meanings prescribed by IFRS, and should not be construed to be alternatives to revenues and net loss and comprehensive loss for the period determined in accordance with IFRS or as indicators of performance, liquidity or cash flows. Our method of calculating these measures may differ from the method used by other entities and accordingly our measures may not be comparable to similarly titled measures used by other entities or in other jurisdictions.
- Normalized EBITDA as defined by the Company means earnings before interest and financing costs (net of interest income), income taxes, amortization, depreciation, and certain one-time costs and adjusted for expected go-forward expense.
About Contagious Gaming
Contagious Gaming Inc. (TSX-V: CNS) is a rapidly emerging developer of unique and engaging software solutions for regulated gaming and lottery operators around the world. The Company is currently focused on deploying its first-to-market lottery-style sports betting platform in the United Kingdom and its proprietary digital instant lottery content in United States and other international jurisdictions. Contagious Gaming’s sports betting platform is the first sports betting system to allow players to chase a dynamic jackpot live during Premier League soccer matches. The Company is a first mover in the roll-out of digital instant lottery content in the United States. For more information on Contagious Gaming please visit www.contagiousgaming.com.
For further information please contact:
Email: justin.barragan [at] contagiousgaming [dot] com
Phone: (647) 886-8551
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Certain information in this news release is considered forward-looking within the meaning of certain securities laws and is subject to important risks, uncertainties and assumptions. This forward‐looking information includes, among other things, information with respect to the Company’s beliefs, plans, expectations, anticipations, estimates and intentions. The words “may”, “could”, “should”, “would”, “suspect”, “outlook”, “believe”, “anticipate”, “estimate”, “expect”, “intend”, “plan”, “target” and similar words and expressions are used to identify forward‐looking information. The forward-looking information in this news release describes the Company’s expectations as of the date of this news release.
The results or events anticipated or predicted in such forward-looking information may differ materially from actual results or events. Material factors which could cause actual results or events to differ materially from such forward-looking information include, among others, risks arising from general economic conditions and adverse industry events.
The Company cautions that the foregoing list of material factors is not exhaustive. When relying on the Company’s forward-looking information to make decisions, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. The Company has assumed a certain progression, which may not be realized. It has also assumed that the material factors referred to in the previous paragraph will not cause such forward-looking information to differ materially from actual results or events. However, the list of these factors is not exhaustive and is subject to change and there can be no assurance that such assumptions will reflect the actual outcome of such items or factors.
THE FORWARD-LOOKING INFORMATION CONTAINED IN THIS NEWS RELEASE REPRESENTS THE EXPECTATIONS OF THE COMPANY AS OF THE DATE OF THIS NEWS RELEASE AND, ACCORDINGLY, IS SUBJECT TO CHANGE AFTER SUCH DATE. READERS SHOULD NOT PLACE UNDUE IMPORTANCE ON FORWARD‐LOOKING INFORMATION AND SHOULD NOT RELY UPON THIS INFORMATION AS OF ANY OTHER DATE. WHILE THE COMPANY MAY ELECT TO, IT DOES NOT UNDERTAKE TO UPDATE THIS INFORMATION AT ANY PARTICULAR TIME.