Gaming Realms in Realnetworks deal

The deal involves a USD 10M payment on completion followed by two deferred tranches of $4 million paid one & two years after the deal is completed respectively.

Realnetwork has the choice for up to USD 4M of the USD8M deferred payment to be paid in Gaming Realms shares.

To fund the initial consideration of the acquisition, Gaming Realms has issued 50 million new shares in the company at 25 pence per share to raise GBP12.5 million, which will fund up to $14 million of the total consideration.

Under the terms of the deal, Gaming Realms will acquire GameHouse US & Canadian Game studios; the Social & Mobile Freemium portfolio of games & publishing network; the Slingo Brand & associated patents; certain game domains including Sudoku.com & Mahjong.com; an intellectual property licence relating to the GameHouse Promotion Network & the entire issued share capital of Backstage Technologies.

Gaming Realms says the acquisitions give it an entry point into the North American market whilst the Slingo brand will open up the social casino gaming segment of online gaming. The deal additionally brings an experienced management team with sector experience from companies such as GTech, Aristocrat, Double Down Interactive & Xbox Live.

"Slingo is a well-established brand & has already benefited from sitting on our platform alongside our Pocket Fruity & Spin Genie brands. The addition of Slingo to our existing portfolio creates an exciting player offering," said chief executive Patrick Southon.

"The directors believe that the acquisition will transform the group into an international, multi-brand developer in real & casual gaming & that it will greatly enhance the Group's capabilities in development, distribution, marketing & ownership of intellectual property," he added.

Gaming Realms plans to use Slingo to launch a new real-money gambing product through its Spin Genie product. Slingo, a combination of slots & bingo, proved to be a powerful brand during its partnership with Zynga, attracting 54 million monthly active users as a freemium game, but after that appeared to falter.

RealNetworks acquired the asset in 2014 for USD 15.6M & extended its reach with a new app titled Singo Adventure earlier this year. Both the acquisition & placing are conditional on shareholder approval at a meeting due to be held on August 10.