NetEnt, a leading provider of online gaming systems, has signed a contract to buy Red Tiger Gaming Limited. This is an all-cash deal that will enable NetEnt to further contrivance its strategy to “create the future of gaming.”
Under the terms of the transaction, NetEnt is to make an initial payment of £200 million, and make an additional payment of £23 million in 2022. The transaction has been finalized and is anticipated to be add to the growth of NetEnt’s EPS in 2020.
Red Tiger was founded in 2014 and provides casino games and related gaming software for the international online gambling market. In the recent past, the company welcomed the success of its new jackpot product—the Daily Drop Jackpot Network, which paid out over £2.5 million in daily jackpots since it launched in April 2019.
Currently, Red Tiger has close to 170 employees in its Malta, Bulgaria and Isle of Man offices. Its EBITDA is anticipated to hike to £18 Million in 2019. Their content is available across multiple states through a series of content supply deals it has acquired in recent years.
During the press release, NetEnt said that the new acquisition would provide it with the opportunity to get the most out of on its scalable technology and back its future growth.
Terms of the Deal
NetEnt stated that it has agreed to pay an initial payment of £200 million for 100% of the shares of the Red Tiger Gaming Company. In 2022, the company is to pay an additional £23 million, which is subject to the financial performance of the newly acquired Red Tiger Gaming over the two years.
NetEnt disclosed that its revenue for the 3rd quarter of the year would include around $5.7 million in deals and funding related costs. The firm also stated that new debt facilities – Nordea and Danske Bank, funded the purchase of the Red Tiger Company.
Comments Made On The Deal
Red Tiger Gaming CEO, Gavin Hamilton commented on the deal and said that this is an exciting new stage of the Red Tiger story and they are happy to be part of the NetEnt group. Having access to NetEnt’s unmatched supply network and geographic footprint will open up new opportunities for them and will accelerate their growth.
He further stated that they will remain focuses on driving further innovation and are eager to work with NetEnt on how to pull together their combined capabilities to develop new products that will interest their customers.
Therese Hillman, NetEnt’s CEO, also commented on the deal and said that they are happy to welcome Red Tiger and the transaction that brings together the two leading and most inventive firms in the online gaming sector. He went on to say that they expect the addition of Red Tiger to boost their combined global reach and create substantial revenue interactions across their global markets.
Aside from other states, NetEnt has been mostly attentive on growing its foothold in the controlled US gaming market. Their content has been available in New Jersey under a temporary license, but early this year, they were awarded a permanent license by the New Jersey Division of Gaming Enforcement.
NetEnt casinos have also made a return to Canada after a 3 year break. After striking a deal with the British Columbia Lottery Corporation in 2017, they removed all games from online casinos available to Canadians but have recently rolled out their games once more to attract the lucrative Canadian gambler.
The provider also gained entry to Pennsylvania’s online gambling industry after the unveiling of the state’s first online casinos in July. NetEnt obtained a license in the Keystone State in March 2019.
NetEnt was launched back in 1996 and is a pioneer in developing games for online casinos. In 2013, the company expanded their selection of video slots to include live casino that includes best, studio-based roulette and blackjack tables. While they may not have a wide collection of games, their approach to mobile live casino and technology brings forth something different. Catch up with our crypto blackjack article to find more details.
NetEnt is listed on the NASDAQ Stockholm and has over 1000 employees in New Jersey, Gibraltar, Gothenburg, Krakow, Kiev, Stockholm, and Malta.