- »NetEnt Acquires Red Tiger Gaming
NetEnt Acquires Red Tiger Gaming
NetEnt has long been one of the largest online gaming software companies in the world. This week, NetEnt grew even more with the acquisition of Red Tiger Gaming, another online gaming supplier in the industry.
The £197 million deal increases NetEnt’s range of offerings substantially.
NetEnt entered into an agreement for an all-cash deal to buy Red Tiger Gaming Limited. The initial enterprise value of £200 million includes a possible additional amount of maximum £23 million in 2022.
The deal will be done expeditiously, and it will be reflected in NetEnt’s EPS in 2020.
The initial consideration of £197 million will garner 100% of Red Tiger’s shares. The extra £23 million may be paid in 2022 on an earn-out basis, dependent upon Red Tiger’s financial performance through 2021. That all puts the maximum enterprise value of the deal at £223 million.
NetEnt will incur approximately SEK 55 million in costs related to this transaction that will show up in its third quarter results in 2019.
Danske Bank and Nordea handled the financing of the acquisition through new debt facilities.
The press release for the deal noted that the acquisition is an opportunity for NetEnt.
NetEnt has invested in a global infrastructure to reach more customers and operate in more regulated markets over the past several years. That base supported a platform for growth.
With that, NetEnt’s acquisition of Red Tiger provides an opportunity to “capitalize on its scalable technology” for even further growth.
As for Red Tiger, CEO Gavin Hamilton called the deal an “exciting new stage of the Red Tiger story.”
He added, “Accessing NetEnt’s unparalleled distribution network and geographic footprint will unlock new opportunities for Red Tiger and will further accelerate our growth.” Hamilton also said that his company would remain focused on driving further innovation and leveraging its capabilities in conjunction with NetEnt to create new products.
NetEnt CEO Therese Hillman welcomed Red Tiger into the NetEnt Group. “We look forward to working with Red Tiger’s fantastic team to enhance our combined global reach and to offer further value to operators and players. The transaction will provide significant revenue synergies across our markets worldwide.”
Positive Move for NetEnt
The Swedish company was founded in 1996 and set out on a steady path of growth. From that time, when internet gaming was in its infancy, NetEnt has seen the potential of digital entertainment.
NetEnt grew from a relatively small fish in a big pond to one of the three biggest fish. In addition to Playtech and Microgaming, NetEnt is one of the very top gaming solutions providers in the global online gaming market.
That growth led to the international company it is now, complete with a listing on Nasdaq Stockholm. Its stock price had hovered around SEK 24-25, but news of the Red Tiger deal pushed it as high as SEK 30.45, a significant jump.
NetEnt employs approximately 1,000 people, and they are scattered from Malta to Stockholm, Kiev to Krakow, Gothenburg to Gibraltar, and even now in New Jersey in the United States.
Its library contained – before the Red Tiger acquisition – more than 200 game titles. They are offered in 24 languages in 23 regulated markets.
Revenue for NetEnt in 2018 was SEK 1.782 million, showing 8.9% growth over the previous year.
About Red Tiger
A newer player in the online casino world, Red Tiger was established in 2014 but became known for its innovative casino games and daily jackpot games.
With upwards of 170 employees in Malta, Bulgaria, and the Isle of Man, the company was consistently growing in the European and Asia markets.
Red Tiger accumulated numerous awards for its work. From the beginning of 2018 to the current day, these are the awards on its shelf:
- February 2018: Gaming Intelligence Award for One to Watch
- June 2018: WhichBingo Award for Best Online Slot (Rocket Men)
- June 2018: EGR B2B Award for Mobile Supplier of the Year
- June 2018: EGR B2B Award for RNG Casino Supplier of the Year
- February 2019: Gaming Award for iGaming Software Supplier
- February 2019: Gaming Intelligence Award for Casino Supplier of the Year
- June 2019: EGR B2B Award for Innovation in Mobile
- June 2019: EGR B2B Award for Mobile Gaming Software Supplier
Red Tiger expected its full-year 2019 earnings to hit a new high of £18 million.
As one of the top online casino game developers for Canadian online casinos, Red Tiger regularly produced innovative and exciting new products for players. The most recent was Pirates’ Plenty: Battle for Gold.
The company also just released its 100th game.
When the Red Tiger library of games combines with that of NetEnt, which has offered games like Butterfly Staxx 2, players will benefit from even more new games.