Major operator Kindred Group has taken up the option to acquire the remaining 66.6 per cent of outstanding shares in slots developer Relax Gaming.
At an implied value of €320m for 100 per cent of the shares – on a cash and debt free basis – the acquisition of Relax accelerates Kindred’s product control and differentiation capabilities.
Henrik Tjärnström, CEO at Kindred Group, commented: “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.”
Patrik Österåker, co-founder and chairman of the board at the Relax Gaming, added: “Joining Kindred Group comes as a natural next step in our long-standing cooperation with Kindred across all our product verticals. 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.
“Our continued independence is a key element of the transaction, and I am happy to remain on the board of Relax Gaming.”
In order to secure continued integrity of Relax Gaming’s B2B customers, Kindred said its intention is to keep Relax Gaming as an independent entity within the Group with a separate board of directors and management team.
Kindred’s ambition is to continue investing in Relax Gaming to cement its position as a leading B2B igaming supplier by further strengthening Relax Gaming’s product offering and broadening its B2B customer base.
In conjunction with the completion of the transaction, all existing employee share option programmes in Relax Gaming will be exercised and Relax Gaming’s management, who are committed to the future success of the company, will retain an ownership of seven per cent of total fully diluted shares in the company. Meanwhile Kindred’s ownership stake in Relax Gaming will be 93 per cent after the completion of the transaction and the exercise of the options.
The acquisition is expected to generate annual run-rate synergies of €8m within the next three years for the Group driven especially by lower investment needs and reduced cost of sales.
The total value of the outstanding shares are approximately €295m – equity value. As part of the purchase, Kindred will pay an initial consideration, settled in cash upon completion, of around €80m.
Alongside the initial consideration, the maximum earn-out payments will amount to €11m and become payable in 2022 and 2023, subject to Relax Gaming achieving certain earning thresholds. The transaction will be financed through Kindred’s existing cash and credit facilities.
Earlier this month, Kindred extended its partnership with Relax Gaming, which delivered a series of avatars exclusively for customers of the online gambling group.