Mobile games developer Gaming Realms has agreed a deal to sell off its real-money subsidiary Bear Group to Oslo-listed River iGaming for £11.5m, also providing a permanent licence for its platform.
The cash consideration for the transactions includes the settlement of the contracted deferred £4.2m owed by River UK Casino to the group, due in October 2020.
Gaming Realms will now focus on game development and the international licensing of its retained Slingo brand and IP, with proceeds from the sale being used to repay a £3.5m loan to JPJ Group.
Bear Group delivered £8.8m of net gaming revenue and adjusted EBITDA of £0.5m in FY2017.
Gaming Realms aims to build on revenue from games licensing that grew 220 per cent from £0.55m in FY2017 to £1.75m for the unaudited period FY2018.
The transaction is expected to result in a reduction of the group’s operating and administrative expenses amounting to around £3m on an annualised basis.
Gaming Realms has also announced that unaudited trading results for FY2018 are expected to show revenue and adjusted EBITDA in line with market expectations, with an adjusted EBITDA loss of £0.7m. The licensing of proprietary online games had a strong 2018 and the revenue for the first six weeks of 2019 was running 118 per cent above the daily average of the previous year.
Patrick Southon, CEO of Gaming Realms, said: “The new UK regulatory environment, together with increases in point of consumption tax, has made it increasingly difficult to operate a sole UK-facing casino and real money platform.
“However, the acquisition of the Slingo brand and IP in 2015 has enabled the company to become a highly regarded developer and licensor of games in the international gaming market. This is a high growth market and one that the board believes can be further developed for the benefit of shareholders.”