paying US$65 million in cash and stock for WowWee Ltd., a privately
held Hong Kong developer of robot toys.
Optimal Group - which began as a developer of retail self-checkout
systems and in 2004 sold that operation to enter online payment
processing, a businesses it is now considering selling - said Thursday
it will pay US$55 million in cash for WowWee, with the other $10
million in shares.
Optimal Group, headquartered in Montreal and listed on the U.S. Nasdaq
market, said WowWee had 2006 revenue of US$117 million, down from $131
million in 2005, with $5 million in earnings before interest, taxes,
depreciation and amortization, down from $27.5 million.
Its products include Robosapien, Roboraptor, Roboreptile, Robopet
and Robopanda, as well as a recently introduced the radio-controlled
Optimal Group said WowWee's management will remain in place.
WowWee, with 65 per cent of its sales in North America, "has
demonstrated the ability to be at the forefront of consumer trends with
emphasis placed on evolving consumer preferences for technology-based
electronic products," Optimal Group stated.
The company also disclosed that it "has from time to time received
expressions of interest from certain third parties interested in
acquiring the payments business and has allowed limited investigation
and review to be conducted."
The payments business stopped processing transactions from the
United States after the U.S. Unlawful Internet Gambling Enforcement Act
was passed last Oct. 13. Optimal Group has "streamlined" the business
and "has provided an initial response to a voluntary request for
information" from the U.S. Attorney's office in New York.
Optimal Group added that it "will continue to actively explore strategic acquisition opportunities.