Global Approach Signs Agreement To Create One Of Australia’s Premier Online Gaming Companies
Mar 29, 2006
ASX RELEASE – Wednesday 29th March 2006
PURCHASE CONSIDERATION AND TRANSACTION CONDITIONSA purchase consideration of $19.375 million has been agreed and is in line with a preliminary valuation undertaken on behalf of the vendors. The purchase consideration for the Tusk Group was based on a number of factors including trading history, past growth and the Tusk Group’s management anticipated Revenue of $7.1 million and EBITDA of $2.5 million for the 12 months ending 30 June 2006. In addition to conducting its own due diligence on the Tusk Group, GLO shall engage an independent expert (details of which are set forth below) to give an opinion as to whether the transaction is fair and reasonable to non-associated shareholders. The purchase consideration of $19.375 million has been structured as follows: 1. Issue of 155 million fully paid ordinary shares at an issue price of 12.5 cents per share (Consideration Shares). 2. In accordance with the ASX Listing Rules it is likely that ASX will impose a restriction on the disposal of those Consideration Shares issued to MDA Capital (a significant shareholder of Tusk – the details of which are set forth below) for a period of twelve (12) months from the date of issue. In addition, under the terms of the transaction, all vendors’ Consideration Shares will be voluntary escrowed for two years from the date of issue. 3. The agreement is subject to satisfactory completion of Due Diligence, Regulatory and Shareholder approval. Shareholder approval will be sought pursuant to section 611 of the Corporations Act 2001 (Cwlth) and ASX Listing Rules 7.1,10.1, 10.11 and 11.1.2 and for all other purposes required by GLO. To ensure non-associated shareholders are provided with sufficient information to make a decision on the proposed acquisition and meet the requirements of the Corporations Act 2001 (Cwlth) and ASX Listing Rules generally, GLO will engage an independent expert to provide an opinion on the proposed acquisition as to whether the proposed acquisition of the Tusk Group is fair and reasonable to non-associated shareholders. This report shall be included within the GLO shareholder meeting materials. To incentivise the Tusk Group employees following the acquisition, GLO has agreed to allocate up to 10 million options to senior management of Tusk (Employee Options) exercisable at 15.0 cents with incentive hurdles to be set on their issue. GLO shall seek shareholder approval for the issue of the Employee Options. Details of the incentive hurdles shall be finalised prior to the GLO shareholder meeting and will be included within the GLO shareholder meeting materials.
POST MERGER SHARE STRUCTURESubject to necessary approvals, the merged entity will have the following share structure.
POST MERGER BOARD STRUCTUREThe post merger board structure will be as follows: David Barwick Chairman James Canning-Ure Managing Director Don Nissen Non Executive Director Mike Veverka Non Executive Director Alan Phillips Non Executive Director Bill Lyne Non Executive Director/Secretary
Mr Don Nissen - Proposed Non-Executive DirectorMr Nissen has had 40 years experience in Banking & Finance retiring from the position of General Manager, Queensland for the Commonwealth Bank at the beginning of the year 2000. Soon after he joined the Board of Ariadne Limited and still retains that position as well as being Chairman of that company’s Audit Committee. Through this position Mr Nissen is also a Director of a number of Ariadne Limited subsidiaries. In addition, Mr Nissen joined the board of MacArthur Coal Limited upon public listing in July 2001.
- Chairman and Director of Energex Limited from January 2000 until October 2004.
- Director and Chairman of Brisbane Broncos Limited from 1999 until October 2004.
- Director of Workcover Queensland from March 2000 until October 2004.
- Director of Collection House Limited from July 2000 until December 2001.
TIME FRAMEDirectors have begun preparing a Notice of Meeting and Explanatory Memorandum. The proposed timetable includes:
- Completion of due diligence by both parties (28th April 2006).
- Execution of transaction documentation (8th May 2006).
- Despatch of notice of meeting documentation to GLO shareholders (10th May 2006).
- GLO shareholder meeting to approve transaction (9th June 2006)
- Anticipated settlement of transaction (30th June 2006).
POST MERGER GAMING OPERATIONSThe merged operations will contain the following casino brands and web sites. 1. Golden Reef Casino – www.goldenreefcasino.com 2. Challenge Casino – www.challengecasino.com 3. Nostalgia Casino – www.nostalgiacasino.com 4. Music Hall Casino – www.musichallcasino.com 5. UK Casino Club – www.ukcasinoclub.com The merged operations will also have the following poker websites: 1. My Poker Profit – www.mypokerprofit.com 2. Beach Club Poker – www.beachclubpoker.com 3. Poker Metro – www.pokermetro.com
Cash & Cash Equivalent 7,533,506
TUSK GROUP HISTORY AND CURRENT OPERATIONSThe Tusk Group commenced operations in June 2001. During the start up phase of Tusk Group’s operations significant costs were incurred in previous financial years in marketing the Tusk Group’s online casinos and in expanding its operations generally with a view to establishing itself as a key player in the online gaming industry. This emphasis on marketing and expansion has resulted in the Tusk Group generating (based on unaudited management accounts of the Tusk Group) Revenue of $4.36 million and EBITDA of $1.36 million for the eight (8) month period from 1 July 2005 to 28 February 2006. Further financial information on the Tusk Group shall be included within GLO shareholder meeting materials. The Tusk Group currently has over 45 full time staff specialising in payment processing; online marketing; 24 x 7 Call centre operations; information technology; web design, programming and database development.
KEY STAFFFollowing the completion of the proposed transaction, the following key staff will join Global Approach Limited.
Mr James Canning-Ure - Proposed Managing DirectorMr Canning-Ure has been a corporate advisor and finance director for a number of Queensland companies over the last 20 years with experience at Price Waterhouse and Barclays Bank. Mr Canning-Ure holds a Bachelor of Commerce from the University of Queensland. Mr Canning-Ure shall assume the role of Managing Director of GLO under an executive service contract for an initial term of three (3) years.
Mr Brian Cooke - Proposed Chief Executive OfficerMr Cooke has over 15 years' experience in senior marketing and strategic planning roles in Europe and Australia within industries as diverse as confectionery, information technology, building materials, telecommunications, publishing and gaming. Mr Cooke joined Golden Casket in November 1993 and has worked in a number of senior marketing and business development positions within the organisation. Mr. Cooke has an Honours Degree in Commerce (majoring in Economics and Marketing) from University College Cork in Ireland and has also undertaken executive management programs at the Australian Graduate School of Management and at Macquarie Graduate School of Management.
The Directors of GLO believe the acquisition of the Tusk Group will provide GLO shareholders with a larger presence in the rapidly growing online gaming industry. The Directors anticipate that the merged entity will be profitable with substantial scope for further growth. For further enquiries, please contact: David Barwick, Executive Chairman Ph: (07) 3831 5650 Fx: (07) 3831 5694 Email: firstname.lastname@example.org Web: www.globalapproach.com.au