888 buys Wink Bingo for up to £60 mln

LONDON (Reuters) - Online gaming firm 888 888.L has agreed to acquire Wink Bingo from Daub Ltd for up to 59.7 million pounds and said current trading had remained strong and in line with expectations.

888 has developed new gaming products such as bingo to help offset the impact of losing half of its sales income when online gambling was made illegal in the United States two years ago. Bingo is now the fastest growing area of its business.

The online bingo market has grown rapidly in Britain while traditional bingo club operators have struggled.

“We are delighted to announce the Wink Bingo acquisition as an expansion of our B2C online Bingo footprint in the lucrative UK market. The transaction is financially attractive and will be earnings enhancing,” 888’s CEO Gigi Levy said on Tuesday.

888 will pay an initial 11 million pounds to Daub on completion followed by further payments based on performance and set between five and six times the businesses earnings before interest, tax, depreciation and amortisation in the year to March 31, 2011.

Wink Bingo had revenue of 15 million pounds and pretax profit of 1.3 million pounds in the 11 months to November 30.

888 said it remained confident about its prospects for the full-year. Market expectations for full-year pretax profit currently range between 35 and 39 million pounds with the consensus at 37 million, according to a Thomson Reuters I/B/E/S poll of eleven analysts.

Shares in 888 were trading at 112.8 pence, up 1.1 percent.

Reporting by Matt Scuffham; Editing by Lorraine Turner