Exclusive: PKR launches seven figure investor prospectus
3D poker site unofficially been searching for investment for two years " CEO says process is being formalised but is not ruling out a sale.
PKR has sent out a formal prospectus to potential investors in order to raise a “seven figure sum” to boost “marketing firepower” as it searches to expand the business, but is not ruling out a sale, its chief executive has told eGaming Review.
Malcolm Graham (pictured) said the prospectus was not meant “strictly” for the purpose of a sale but that he would not rule it out if the right offer was made.
“We’re looking to structure something to grow the business but if a sale happens then this is a possibility,” he added.
According to various sources eGR has spoken to the company is estimated to be worth up to £50m, approximately half its value from two years ago.
PKR has been seeking partners and further investment for the last two years on an “informal basis”, Graham told eGR, but has taken the decision to formalise the process by putting together a prospectus giving a detailed breakdown of the company’s financial performance and future potential.
No deals however have materislised during that time nor have any partnerships in the US following numerous visits and meetings with tribal casino groups in particular. Graham said, however that if California were to regulate PKR would be in a “very strong position”.
“We are looking at a number of options and have been for a long time,” Graham said. “We’ll take between three and six months to see what emerges.
“We’re raising money to expand the business and will focus on [spending that on] marketing. It will almost certainly be a process of raising money. There is a real opportunity for us to build the business and add more firepower in marketing, product development and in B2B, particularly in the US. It would also, for example give us more firepower to do a launch in Italy,” he said.
Asked what the company would do if no external investment was forthcoming Graham said it would look to “internal resources” instead.
Graham added that it was not yet ready for B2B in the US, but that it had “done a considerable amount of work internally” and that it had a project plan in place to head down that route. From a B2C perspective, he added, the company was close to launching its iPad version at the end of this year.
Founded in 2006 by computer games entrepreneur expert Jez San who still owns a majority share of more than 40%, the business has, along with the poker market, experienced a fall in both revenues and earnings in the last four years.
eGR understands the company’s revenues have fallen by almost 25% from 2009 to 2012 with the business not cash positive in 2012. This is due largely to its investment in the Italian market which it entered in February this year.
According to sources close to the matter, Graham is said to be confident of raising money or even selling having received numerous enquiries and entering into one early discussion with an unnamed “third party”. Graham denied this was the case when asked by eGR.
Graham has visited the US on numerous occasions in the last two years as PKR has sought to partner with a land-based casino in preparation for a potential regulated online poker market there.
eGR understands it was close to signing a deal with a tribal casino, however no further details are known as to how far these discussions have gone. eGR has also learned that it has worked on replicating a number of land-based casino environments using its well-known 3D software with a source suggesting that if sold the likelihood is that the company would “be acquired by a US casino”.