MSNBC: OnGame sale terms announced -€473m

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Christmas came early for a handful of Swedish IT entrepreneurs who will pocket billions of Swedish kroner in a €473m (SKr4.9bn) deal to sell Ongame, the operator of the gaming website PokerRoom.com, to BETandWIN.com of Austria.

Erik Hornell and his three sons Oskar, Karl and Johan - who own 53 per cent of Ongame - are set to earn nearly SKr2.6bn if the deal is executed at the terms announced on Friday. In addition, Claes Lidell, co-founder, is set to make SKr1.4bn for his 28 per cent stake.

Ongame and BWIN said on Friday 45 per cent of the price would be paid in cash, with 40 per cent financed with shares in the Austrian operator of sports gaming sites, which is listed on the Vienna stock market. The remaining 15 per cent are due to be paid by the first quarter of 2009, although the amount depends on Ongame's financial performance.

Started in 1999, PokerRoom.com is the third largest online poker site in the world behind PartyPoker.com, which is owned by the world's largest online poker group PartyGaming, and Israeli-controlled Pokerstars. It has 6m registered users.

BWIN agreed to pay an earnings multiple of 5.37, although the deal is conditional on Ongame's reaching net revenues of at least €88.19m and minimum earnings of €473.6m before depreciation, taxation and amortisation.

Last year, Ongame's net sales grew to SKr411m, or about €44m at the current exchange rate. The company said it expected the figure to double this year.

Ongame's most important markets are the US and Canada.

Norbert Teufelberger, co-chief executive at BWIN, said: "The acquisition of Ongame significantly advances BWIN's ambition to be a leading global provider of online gaming by combining the two companies' excellent platforms."

The transaction is expected to be earnings accretive from the first year of consolidation.

BETandWin shares fell 1.8 per cent to €80 in Vienna on Friday.

Copyright The Financial Times Ltd. All rights reserved.

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