GIQ Q1 2017
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Kindred unveils £176m 32Red takeover KINDRED GROUP HAS agreed a £175.6m deal to acquire Gibraltar-based 32Red, strengthening its UK presence and expanding its multi-brand strategy. The operator formerly known as Unibet will pay 196 pence for each 32Red share. This represents a 16.3 per cent premium of 32Red’s share price of 172 pence per share as at 22 February. “32Red is a high-quality, customer-focused business with a similar culture to Kindred’s and we are delighted to welcome 32Red and its team into the Kindred Group, and look forward to further developing the brand going forward,” Kindred CEO Henrik Tjärnström said. Tjärnström explained that the acquisition of 32Red was consistent with Kindred’s multi-brand strategy and UK focus, where it already operates under the Unibet and Stan James brands.
“We have consistently and profitably grown 32Red’s market share in the regulated markets of the UK and, more recently, Italy,” 32Red CEO Ed Ware added. “The management team at Kindred have a similar business ph i lo s ophy t o ou r ow n and we look forward to joining forces with Kindred and continuing our successful growth within Kindred Group.” Upon completing the deal Kindred will look to achieve cost and revenue synergies by integrating 32Red into its existing business. For the first time OF THE 32Red will expand its QUARTER casino games offering beyond Microgaming, when it is migrated to the Kindred platform. This is expected to ensure the acquisition is earnings-enhancing in its first full financial year after completion.
DEAL
THE QUARTER’S DEALS IN 60 SECONDS Betsson and Fortuna Entertainment have both had busy quarters, with each operator completing two deals apiece. Betsson’s biggest deal was its £26.4m purchase of UK-facing NetPlay TV, as it looks to bolster its UK presence. This has been complemented by a €3m deal for Premier Casino, a brand owned by Spanish TV network Mediaset España Comunicación. This marks the operator’s first foray into Spain. Fortuna, meanwhile, has finalised two deals which focus largely on Romania’s newly-regulated iGaming market. An €85m deal for Dublin-based Hattrick Sports Group sees it take charge of the country’s leading betting operator Casa Pariurilor, as well as Croatia’s second-largest operator PSK. It also gains a joint venture with Spanish operator Luckia. Its Romanian business is further strengthened through the acquisition of four local operators from its majority shareholder Fortbet Holdings. It has acquired Bet Active Concept, Bet Zone, Public Slots and Slot Arena for approximately €47m. GIQ Q1 REVIEW
Not to be outdone, Playtech has completed yet another acquisition, purchasing games developer Eyecon in a deal worth up to £50m. Eyecon is a specialist developer of online slot content, founded in 1997. Its games have proved particularly popular as add-ons to online bingo sites, especially the perennially popular Fluffy Favourites. Its games are already available through distributors such as 888’s Dragonfish and Playtech’s Virtue Fusion. Going from an M&A veteran to a novice in the space, we move to LeoVegas, which made its first acquisition during the quarter, buying Italy-facing Winga.it from Paf. The Malta-based operator agreed a €6.1m deal to acquire the business, giving it a foothold in Italy’s regulated iGaming market. The quarter also saw the end of an era with Sportech finally agreeing a deal to sell its Football Pools business. FP Acquisitions, a newly-incorporated company controlled by funds advised by private equity firm OpCapita, will purchase the Pools for a cash consideration of £83m.
The quarter in numbers FINANCE
US$264
Amaya’s casino and sportsbook revenue in 2016
33%
Digital revenue growth in 2016 for Ladbrokes Coral
£1.55bn
Paddy Power Betfair’s revenue in 2016 LEGAL
3
Lottery betting licences issued in Malta (2 for operators and 1 B2B)
15%
Likely rate of Australia’s Point of Consumption tax
+300
iGaming sites blocked by Colombia regulator Coljuegos M&A
£176m
Kindred group deal to buy 32Red
£83m
FP Acquisition’s deal to buy the Football Pools
€132m
Total paid by Fortuna for Hattrick Sports and Fortbet’s Romanian operations LICENSING
SEK700,000
Upper limit of proposed Swedish licence fee 5