Media Corporation is buying internet gambling business Purple Lounge for up to £465,000.
The deferred consideration is payable in cash or shares over a period of up to five years. The payments calculation is based on 50% of quarterly free cash flow.
The Malta-based website www.purplelounge.com offers poker, casino games and sports betting. In the year to May 2008, Purple Lounge lost £477,000 on revenues of £16.5m. Media Corp expects to reduce the costs of the business and will use its existing websites www.gambling.com and www.sport.co.uk to help boost business.
Purple Lounge chairman Chris Gorman is joining the Media Corp board.
Shares in Media Corp jumped 0.5p to 1.55p each, which values the online gaming and marketing business at £4.11m.
Loss-making Media Corp had net cash of £2.51m at the end of March 2009. Media Corp could return to profit in the year to September 2010.
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