One of the leading software developers NetEnt has announced that they will acquire the fast-growing slot supplier Red Tiger Gaming. Initial enterprise value is £200 million plus a possible additional amount of £23 million in 2022. The Swedish-based developer says that the deal is in line with their vision to create the future of gaming.
According to the press release published on the NetEnt official website, the developer has entered into an agreement to acquire fast-growing online slot supplier Red Tiger in an all-cash deal worth £200 million initially. Founded in 2014, Red Tiger Gaming has quickly become one of the leading providers of casino games. Lately, they have come to the attention thanks to their highly popular daily jackpot games. The Malta-based company has approximately 170 employees. Apart from their offices in Malta, they have operations in the Isle of Man and Bulgaria. Before interest, taxes, depreciation and amortization (EBITDA), Red Tiger’s earnings are expected to reach $18 million for the full year 2019.
It is stated that NetEnt pays an initial consideration of approximately $197 million for 100% of the shares of Red Tiger. A remaining amount of maximum $23 million may be paid in 2022 on an earn-out basis, which will depend on Red Tiger’s financial performance over the next two years. This could amount the maximum enterprise value to $223 million.
NetEnt’s income for the third quarter of 2019 will include approximately SEK 55 million (£4.6 million) of the transaction and financing-related costs. The company financed the acquisition primarily through new debt facilities provided by Danske Bank and Nordea.
The acquisition of Red Tiger is in line with NetEnt’s vision to create the future of gaming, says the developer. They have invested in a global infrastructure over the last several years focusing on customer reach and regulated markets and supporting a platform for scale. NetEnt sees the deal as the opportunity to capitalize on its scalable technology, which will support future growth.
Therese Hillman, Group CEO of NetEnt, says that the acquisition combines two of the leading and most innovative companies in the online gaming industry.
“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,” says Hillman adding that the transaction will provide significant revenue synergies across their markets worldwide.
For Red Tiger, this is an exciting new stage of their story.
“Accessing NetEnt’s unparalleled distribution network and geographic footprint will unlock new opportunities for Red Tiger and will further accelerate our growth,“ comments Gavin Hamilton, CEO of Red Tiger.
At Red Tiger, they say they will remain focused on driving further innovation. They are looking forward to working with NetEnt on how to leverage their combined capabilities and create new products that will wow their customers.
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