* Agrees to buy Gioco Digitale for shares and cash
* Will pay 2.3 mln new bwin shares, up to 50 mln euros cash
* Valuates Gioco at around 6 times EBITDA
* Bwin shares drop 1.7 percent (Adds details)
VIENNA, Sept 14 (Reuters) - Austrian Internet betting and
gambling operator bwin
The purchase, which bwin flagged last week, will make bwin the biggest poker operator in Italy, which has deregulated the online gambling market more than other European countries and has made it attractive for commercial gambling operators.
Europe's fragmented Internet gaming industry is in a period
of consolidation. Britain's PartyGaming
Bwin agreed to buy 56 percent of Gioco for 2.3 million new bwin shares, worth 65 million euros at Friday's closing price. It will buy the rest for up to 50 million euros in cash, 5 million of which depend on Gioco reaching 2009 earnings targets.
The new shares issued for the purchase represent 7 percent of bwin's outstanding capital.
Gioco had earnings before interest, tax, depreciation and amortisation (EBITDA) of 9.2 million euros in the first half of 2009, which, if annualised, gives it a valuation of around 6 times this year's EBITDA.
The deal is subject to bwin supervisory board approval and is expected to close by early October. Gioco CEO Carlo Gualandri will join bwin's management team and will develop all of bwin's Italian business in the future.
Gioco is currently the biggest online poker brand in Italy with a market share of around 20 percent, while bwin has around 6 to 7 percent, according to analysts. ($1=.6879 EURO) (Reporting by Sylvia Westall; editing by Simon Jessop and Andy Bruce)