The really big news on Wednesday 24 June 2020 was the news that the live casino specialist Evolution Gaming has made an appointment with the Swedish game developer NetEnt About taking over 90% of operations. Evolution Gaming puts £ 1.6BN on the table. Which corresponds to around NOK 19 billion at today's price.
In an announcement from Evolution Gaming, the following is stated:
Evolution Gaming Group AB has announced a public offer to the shareholders of NetEnt AB to sell all their shares in NetEnt to Evolution in exchange for 0.1306 Evolution shares for each stock in NetEnt a shareholder has. The offer includes both the unlisted shares in category A and the shares in category B that has been taken up for trade at Nasdaq Stockholm. Evolution Gaming will not change the offer.
The offer from Evolution Gaming to NetEnt in short moves
- Evolution Gaming offers 0.1306 Evolution shares for each stock in NetEnt.
- Evolution Gaming will not change the offer
- The offer values each share in NetEnt at 79.93 sec and all shares in NetEnt to approximately SEK 19,6 billion.
- The offer represents a percentage rate of 43 per cent compared to the closing rate for the NetEnt share of category B at Nasdaq Stockholm on June 23, 2020 (which was the last trade day before the announcement of the offer) and a percentage rate of 72 per cent compared to the volume-weighted average price per NetEnt share in category B at Nasdaq Stockholm during the last 30 trading days until June 23, 2020.
- The board of NetEnt unanimously recommends the NetEnt shareholders to accept the offer.
- Shareholders who, in total or indirectly, control 21.02 per cent of all shares and 45.02 per cent of all votes in NetEnt have committed to accepting the offer. In addition, certain NetEnt Board members who direct or indirectly control 8.48 percent of all shares and 23.20 percent of all votes in NetEnt have stated that they intend to assume to accept the offer. The implementation of the offer is contingent on That, among other things, the offer is accepted by the shareholders to such an extent that Evolution becomes the owner of more than 90 per cent of the shares in NetEnt (on a fully diluted basis) and that an extraordinary general meeting in Evolution decides to authorize the Board to decide on the issuance of the number issuance Shares in Evolution that Evolution will pay for remuneration to the shareholders in NetEnt who accept the offer. Shareholders who in total control approximately 32.53 per cent of all shares and votes in Evolution have expressed that they are positive about the offer and that they intend to vote for the board's proposal for authorization to issue shares.
- Evolution will publish an offer document regarding the offer around August 14, 2020. The acceptance period for the offer will start around August 17, 2020 and expire around October 26, 2020.
NetEnt bought Red Tiger in 2019
This is the second major acquisition that happens in a short time. NetEnt even bought the game developer Red Tiger in 2019. An agreement that then cost them £ 223 million - which corresponds to almost £ 2.7 billion!
Background for the acquisition of NetEnt
In the announcement of the offer Evolution Gaming came to NetEnt, the background for the acquisition of NetEnt was also stated. They have a long -term strategic goal of becoming a leader in the casino industry, and explains it in key words in this way:
- This is a milestone that will accelerate Evolution Gaming from becoming a world leader in the online gaming industry.
- The merger of Evolutions leading position in the live casino with Net's strong position in online slot machines will create a best-in-class B2B supplier with the capacity to digitize the global gaming industry (90 percent of the global casino industry is still land-based).
- The US market has the potential to become Evolutions' largest market over time as individual states regulate. The merger of Evolutions existing live casino offers through the existing New Jersey studio, as well as the planned studios in Pennsylvania and Michigan, with Net's strong US presence in online slot machines, will accelerate this development and quickly get the company's position into the US gaming market.
- The combined product portfolio will include some of the world's most popular live casino and online slot machines and generate revenue rises through cross sales and improved distribution via both companies 'customer base, with closer customer partners and further geographical spread of the companies' products as a result. The area for the combined offer will provide significant upsides to customers and players' experience, and enable new collaboration between world -class development resources.
- The combination is expected to result in annual cost savings of approximately 30 million euros, compared to the total cost basis for NetEnt and Evolution from the first quarter of 2020. This includes cost savings of approximately SEK 150 million that NetEnt has already stated.
- The combined company will become a leading online gaming supplier with a strong platform for international growth and expansion, both organically and through further acquisitions.
Comments about the agreement from the Chairman of the Board
Jens von Bahr, chairman of Evolution Gaming, says the following:
“This strategic agreement marks a significant step towards Evolutions long -term vision of becoming the global market leader in the online casino industry. The combination of Evolutions strong offers in the live casino with Net's leading position in online slot machines will result in a world -class portfolio of online games that will enable us to serve a growing customer base. Furthermore, Net's established US positioning combined with Evolutions existing American studios and "first-to-regulated market strategy" will put us in a favorable position to utilize the ongoing regulation in North America. "
Mathias Hedlund, Chairman of the Board of NetEnt, has the following to say about the agreement:
“NetEnt has recently improved its technological and product development opportunities and thus the growth prospects. At the same time, the company has reached a strong position in US states that have opened for online casinos. With this agreement, there are unique opportunities to shape a leading global B2B supplier of online casinos, and benefit from market development with continued digitalisation and strong growth, especially in North America. Evolutions' position in live casino combined with Net's position in online slot machines will create a company that is well positioned to take significant market shares. Through this transaction, a new chapter in the development of more entertaining online casinos begins, for the benefit of players, operators, employees and shareholders. "