PartyGaming, one of the world’s biggest online gaming companies, has announced its acquisition of two rivals – Empire Online and Intercontinental Online.  This will give PartyGaming ownership of some very well established web sites, including NoblePoker.com, MissBingo.com and MagicBoxCasino.com.

It is reported that Empire Online cost the PartyGaming company around £19.2 million. The recent legislation in the United States that effectively outlawed internet gaming meant that Empire would have found it extremely difficult to remain independent, so the acquisition by PartyGaming was greeted with the kind of enthusiasm not normally seen in such circumstances.

The acquisition of Internet Online, which looked to be facing similar post-legislative difficulties as Empire, is said to be costing £14 million.  By acquiring both companies, PartyGaming has started what one source described as “a wave of consolidation” that is expected to spread throughout the whole industry during 2007.

It is thought that PartyGaming will generate an additional $8.5 million profit in 2007 alone thanks to the acquisition of Empire Online and Intercontinental Online. $6 million of this will come from Empire’s stable of web sites, and $2.5 million from that of Intercontinental.

Mitch Garber, CEO of PartyGaming, said: “These acquisitions represent excellent value for our shareholders and are consistent with our strategy. They bring incremental EBITDA [Earnings Before Interest, Taxes, Depreciation and Amortization] and strong management with excellent marketing skills
that will help us to accelerate our promotional plans for each of our individual products, particularly in casino which will continue to be spearheaded by PartyCasino. The addition of a number of well known secondary brands, supported by the agreement with Playtech, will provide opportunities for cross-promotion, increasing customer choice and satisfaction and maximising the long term value
of current and future players.”

The software for the web sites of both the acquired companies was previously provided by Playtech, a company which was founded in 1999 and is listed on London’s Alternative Investment Market. PartyGaming has recently announced that it has concluded a new four year software licensing agreement which will keep that software provision in place.

Avigur Zmora, CEO of Playtech, commented: "This agreement with PartyGaming is a real endorsement from the leading online gaming company and we are delighted to have established this important relationship. The fact that PartyGaming has chosen to continue operating these sites on the Playtech platform is a clear indication of the market leading position that our software holds. We believe that Playtech's software will compliment PartyGaming's existing products whilst providing an additional route to further revenue enhancement. We look forward to a long and successful partnership with PartyGaming."