Kindred Group to acquire casino supplier Relax Gaming2nd July 2021 10:40 am GMT
Stockholm-listed gaming operator Kindred Group has agreed a deal to acquire full ownership of casino games supplier Relax Gaming.
The agreement will see Kindred acquire the remaining 66.6 per cent of shares in Relax Gaming which it does not already own, having first invested in the business in 2013.
Kindred said that the acquisition will accelerate its strategy to increase focus on product and customer experience by strengthening the company’s product control and product differentiation capabilities.
“Through this acquisition we add a rapidly growing and profitable B2B business with a world-class product portfolio, giving us greater control over our casino, poker and bingo offering, putting Kindred in a significantly better position to achieve our long-term strategy to increase our focus on product differentiation and customer experience," said Henrik Tjärnström, chief executive of Kindred Group.
Kindred will acquire the remaining 66.6 per cent shareholding for €80m in cash upon closing on a cash and debt free basis, alongside a maximum potential earnout of €113m payable in 2022 and 2023, subject to the performance of the business.
The transaction values Relax Gaming at up to €320m on a cash and debt free basis and will be financed through Kindred's existing cash and credit facilities.
Relax Gaming generated revenue of approximately €25m in the twelve months to May 2021, with EBITDA of approximately €10m.
“Joining Kindred Group comes as a natural next step in our long-standing cooperation with Kindred across all our product verticals,” said Patrik Österåker, Relax Gaming co-founder and chairman. “Kindred's strengthened presence will allow Relax Gaming to further invest in and accelerate the expansion of our B2B offering across the globe.
“We will continue the Relax Gaming journey as a separate B2B entity with unchanged product portfolio and overall strategy, staying true to our values and respecting the hard-earned trust of our customers,” added Österåker. “Our continued independence is a key element of the transaction, and I am happy to remain on the board of Relax Gaming.”
Relax Gaming currently supplies poker and bingo content on an exclusive basis to Kindred alongside its casino content, with the acquisition expected to generate annual run-rate synergies of €8m within the next three years, driven by lower investment needs and reduced cost of sales.
Relax will continue to operate as an independent entity with its own board of directors and management team, with current management retaining an approximate 7 per cent stake in the business.
The transaction is expected to complete in the fourth quarter of this year.
Shares in Kindred Group plc. (STO:KIND-SDB) closed 2.27 per cent higher at SEK137.20 per share in Stockholm Thursday, prior to this morning's announcement.