CryptoLogic to move HQ to 'gaming friendly' Ireland
Last Updated: Monday, September 25, 2006 | 5:17 PM ET
CBC News
CryptoLogic Inc. announced Monday it will move its headquarters from Toronto to Ireland early next year, saying Europe is a more "gaming-friendly" environment that offers it more "strategic flexibility."
The company, which makes software for the online gambling industry, will keep its software development team in Canada but will move its senior management to Ireland in January.
CEO Lewis Rose will not make the move, however. The company said family reasons prevent him from moving, so he will step down as CEO in 2007. A search for a new CEO is underway.
CryptoLogic three-month trading
"For CryptoLogic, this is about being closer to our customers, and to the world's most thriving internet gaming markets," Rose said in a statement.
"By expanding our presence in gaming-friendly jurisdictions, CryptoLogic enhances its flexibility to pursue all strategic opportunities and broaden the services offered to our customers."
About two-thirds of CryptoLogic's licence revenues come from the U.K. and continental Europe.
Cryptologic shares drop 11 per cent
CryptoLogic will seek a listing on the Alternative Investment Market of the London Stock Exchange. It will keep its listings on the TSX and Nasdaq markets, but proposes to exchange all of its existing common shares for shares in a new Irish-based company to be called CryptoLogic PLC.
Ireland is not new territory for CryptoLogic. Its electronic cash processing system is already located there. "Ireland is recognized as an attractive internet gateway to Europe with state-of-the-art technology infrastructure and skilled personnel to support CryptoLogic's expansion in the fast-growing and global internet gaming market," a company release said.
CryptoLogic said the relocation of its head office will have a one-time cost of $8.5 million US. After that, the company said it could cost as much as $3 million US extra each year in additional staff and office expenses to be in Ireland.
Analysts speculated that the added costs were behind the big drop in Cryptologic shares Monday. They lost more than 11 per cent of their value on the TSX — closing down $3.36 to $26.70.
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