Evolution Gaming swoops in to take control of rival NetEnt

Stockholm-listed supplier Evolution Gaming has made a bid to acquire rival NetEnt in an all share transaction.

Evolution is offering NetEnt shareholders 0.1306 shares in Evolution Gaming for each NetEnt share held, valuing each share NetEnt share at SEK79.93, a 43 per cent premium on the stock's closing price on Tuesday June 23.

This values NetEnt at SEK19.6bn or approximately €1.86bn.

“This strategic acquisition is an important part of Evolution's long-term vision to become a market leader in the global online gaming industry,” said Jens von Bahr, chairman of Evolution Gaming.

“The combination of Evolution's strong offering in live casino and NetEnt's leading position in online slots will result in a portfolio of world-class online games that will enable us to serve a growing customer base. In addition, the combination of NetEnt's established position in North America and Evolution's existing studios in the US and our so-called first to regulated market strategy will put us in an advantageous position to capitalize on the ongoing regulation in North America.”

The offer by Evolution Gaming is final and will not be increased, with an expected acceptance deadline of October 26, 2020.

Mathias Hedlund, chairman of NetEnt, commented: “In recent years, NetEnt has improved its tech and product development capabilities and thereby its growth potential while at the same time achieving a strong position in the states of the US that have opened up for online casinos.

“Through this transaction, unique opportunities are created to form a leading B2B supplier in online casinos and take full advantage of the market developments with continued digitalisation and strong growth, especially in North America.”

“With Evolution's position in live casino and NetEnt's position in online slots, the merged company will be well positioned to capture significant market shares,” Hedlund added. “This transaction will start a new chapter in the development of more entertaining online casinos for the benefit of players, operators, staff and shareholders.”

The proposed transaction is not expected to result in significant changes for the employees of either company, who Evolution said “will continue to be of great importance to NetEnt and the combined group's success”.

The offer will now be put to NetEnt shareholders according to takeover rules and is described by the company’s board as being clearly above the consensus benchmark price of stock analysts prior to the offer's announcement.

The company added that it also evaluated other alternatives before concluding that the merger with Evolution is the best current option.

NetEnt said that the combination will offer significantly increased economies of scale and create a leading supplier of online casino products within Live and slots, as well as providing great opportunities to take advantage of a leading position in US states that have opened up for online casino.

Netent’s board has appointed Lazard as a financial advisor and Vinge as legal advisor in connection with the offer, which has been conditionally accepted by NetEnt’s largest shareholders representing 68.22 per cent of the votes and 29.50 per cent of the capital of the company.

Shares in NetEnt AB (STO:NET-B) closed up 2 per cent at SEK56.00 per share in Stockholm Tuesday, prior to this morning’s announcement, while shares in Evolution Gaming AB (STO:EVO) closed 2.38 per cent higher at SEK612.00 per share.