NetEnt has entered into an agreement to purchase an initial £200m share of online casino software vendor Red Tiger with a potential additional cash consideration of £23m. The all-cash agreement is to be finalized in the next few weeks, and remains consistent with the vision of the casino product developer “to develop the gaming future.” NetEnt is set to pay about £ 197m for all Red Tiger’s shares, with the remaining amount likely to become earn-out-based in 2022, subject to their financial performance over the next two years.
This corresponds to a multiple of about 12 times the current year’s EBITDA, with NetEnt’s revenue for the third quarter of 2019 set to include approximately SEK 55 m (£ 4.6 m) of transaction-related expenses and funding. NetEnt Group CEO Therese Hillman said that they are delighted to introduce Red Tiger to the NetEnt Group, and that the acquisition will bring together some of the two biggest names in the online industry.
She added that they are looking forward to be working with the team at Red Tiger in order to improve their global reach, while also giving carriers and players more focus in the future. She continued, saying that the venture will provide significant revenue synergies in a number of global markets. Established five years ago, Red Tiger, which boasts operations across Malta, Isle of Man, and Bulgaria, is expected to reach £ 18 m EBITDA.
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