London – Sportingbet is to pay the vendors of acquisition Paradise Poker an earn-out of approximately GBP 22m in cash and shares even though its US business was shut down last month.
After the introduction of the Safe Ports Act, Sportingbet sold all of its US operations, bar Paradise Poker, for USD 1 though it ceased taking deposits from US resident customers of Paradise Poker on 13 October and started to wind the business down. The Paradise Poker businesses outside the US were unaffected by the new US legislation.
In a statement, Sporting said that the targets of the Paradise Poker acquisition of generating USD 150m of operating profit had been met.
„As a result, the company has today paid USD 33.3m in cash and issued and allotted 9,772,125 Ordinary Shares of 0.1 pence each to Bonaire Investments,“ Sportingbet said.
In addition to the above consideration, Bonaire will also be entitled to receive 10% of cumulative operating profits of the Paradise Poker business in excess of USD 150m for the three year period post completion, the statement said.
This consideration would be payable in cash in late 2007 and represents the final payment due to Bonaire under the acquisition agreement.