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Evolution Gaming Makes Bid to Acquire NetEnt
June 25, 2020 Alex Hoffmann
Evolution Gaming, has officially put an offer on the table to acquire NetEnt, a global distributor of digital entertainment products.
This strategic acquisition proposal from the supplier is based on an all share transaction, offering stake holders 0.1306 shares in the company for every NetEnt share held. The value of each stake is estimated at SEK79.93, which represents a 43% on the stock’s closing price last Tuesday, June 23rd.
In total, this whole transaction is evaluated at SEK19.6 billion or €1.86 billion after conversion. According to Jens von Bahr, chairman at Evolution, the group’s long-term vision and acquisition plan are a significant step towards becoming a market leader in the online gaming sector and beyond.
Offer is Final
As reported, the offer by Evolution is final and it will not be increased. The company has set an expected acceptance deadline until October 26th, 2020. Likewise, the proposed transaction is not expected to bring radical changes for the employees of either company, since the supplier looks forward to building a successful combined strategy.
“The combination of Evolution’s strong offering in live casino and NetEnt’s leading position in online slots will result in a portfolio of world-class online games that will enable us to serve a growing customer base,” added von Bahr.
The chairman also said that the combination of NetEnt’s strong position in North America and Evolution’s existing studios in the US will put both groups in an advantageous position to “capitalize on the ongoing regulation” in various new markets.
As specified by Mathias Hedlund, chairman of the Swedish-based studio, the company has significantly enhanced its production capabilities regarding technology and development in recent years, showcasing an increased growth potential and securing a strong footprint in the global market, especially across the US.
“Through this transaction, unique opportunities are created to form a leading B2B supplier in online casinos and take full advantage of the market developments with continued digitalisation and strong growth, especially in North America. With Evolution’s position in live casino and NetEnt’s position in online slots, the merged company will be well positioned to capture significant market shares. This transaction will start a new chapter in the development of more entertaining online casinos for the benefit of players, operators, staff and shareholders,” commented Hedlund.
Merger is the Best Option
Before making its final decision, NetEnt will evaluate other options, although it is clear that the merger seems like the right choice for its stakeholders. The offer is above the consensus benchmark price according to analysts and a potential combination could immensely increase revenues of both companies in the period, thus creating a leading platform of online casino products in several verticals.
The board has appointed Lazard as a financial advisor, an asset management company that engages in investment banking. In relation to legal advising in this matter, the group has hired Vinge, one of Sweden’s two largest law firms with an annual turnover of approximately 936 million SEK or about $100 million USD.
Source:
“Evolution Gaming Swoops in to Take Control of Rival Netent”, gamingintelligence.com, June 24th, 2020.
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Woh this is huge! My prediction would be quite the opposite to be honest but I guess the tables have turned. Wondering if Netent will go with the offer, that could be their ticket to new markets, players and even larger revenues. It’s definitely going to get a lot more interesting in the period!