SOURCE: Gaming Intelligence Group

32Red Plc has confirmed that it has exchanged contracts to unconditionally sell the Betdirect brand, customer database and certain assets of the Betdirect business to Stan James (Gibraltar) Ltd for £5.75m. 32Red acquired Betdirect last year for £12.5 million.

Stan James will pay 32Red £575,000 as deposit on exchange of contracts today with a further £4,675,000 on completion, which is unconditional and is scheduled for 10 December 2007. A further instalment of £500,000 will be payable in six months.

Proceeds from the sale will be used to continue to expand the 32Red brand profile through casino, poker, and sportsbetting products, to support activities in the UK and to invest in new opportunities in other territories.

The proceeds will also be used to reduce debt levels now that the company is cash generative.

Commenting on the sale, Ed Ware, CEO of 32Red said, "The sale of the Betdirect brand allows us to channel our marketing and management focus on the core 32Red brand, which continues to offer the full complement of casino, poker and sportsbetting products to its customers."

"32Red will also add mobile telephone gaming services and an integrated Bingo offering to its product range in the final quarter of 2007."

"Whilst the recent UK legislative changes effective from 1 September 2007 allow greater access to the UK market, we have identified a number of new territories into which we intend to market the 32Red brand. Our Key Performance Indicators demonstrate encouraging trends in the underlying business and we are confident that, following the divestment of Betdirect, we can continue to deliver shareholder value."

Following completion of the sale, shares of 32Red have resumed trading on the AIM index of the London Stock Exchange this morning. The company has also today released its interim results for the first half of 2007, which were delayed as a consequence of the Betdirect sale.