The following units have significant carrying amounts of goodwill:
31 Dec 31 Dec 31 Dec
2009 2008 2007
d000's c000's c000's
Betboo 3,278 - -
Casino Club 40,339 40,339 40,339
----- ----- -----
43,617 40,339 40,339
----- ----- -----
12. ACQUISITION OF BETBOO
On 2 July 2009, the Group acquired the trade and assets of betboo.com, a leading South American
internet gaming operator, offering, bingo, casino, poker and a sports betting product.
The terms of the acquisition were an upfront payment of US$4 million (c3,040k) with the sellers able
to earn up to a further US$26 million depending on performance, being the sum of: one times the
post tax profits for the year ended 30 June 2010; plus one times the post tax profits for the year ended
30 June 2011; and five times the post tax profits for the year ended 30 June 2012, subject to a
maximum total consideration, including the initial consideration, of US$30 million.
IFRS3, Business Combinations, requires management to value the asset acquired, and, as there is an
element of deferred consideration, to discount this consideration to its present value at the date of
acquisition. Over the period of the earn-out, this discount is unwound, resulting in a charge to the
Income Statement. The group instructed an independent firm of Chartered Accountants to conduct
a valuation of the intangible assets acquired, and a valuation of the purchase price in accordance with
Management have estimated the deferred consideration payable to be c8,963k, and the discount to
be c4,076k, resulting in the discounted value being c4,887k.
The Group acquired the asset through the acquisition of a shell company, Intera NV, (incorporated in
the Netherlands Antilles) and its subsidiary, Intertronic Ltd (incorporated in Malta).
12.1 Cost of acquisition
The fair value of the cost of acquisition was c8,027k and includes the components stated below:
Initial consideration paid 3,040
Acquisition costs 100
Fair value of consideration on acquisition 8,963
Discount back to date of acquisition (4,076)
Non-discounted value of business acquired 12,103
The fair value of the cost of acquisition has been estimated using cash flow projections for the 3 years
to 2012, and discounted using the estimated weighted average cost of capital of 21%.