Kindred Group is set to strengthen its igaming operations via a full takeover of Relax Gaming, acquiring the remaining 66.6% of the firm’s shares.
Conducted at an implied value of €320 million for 100% of the shares on a cash and debit basis, the purchase will see Kindred pay an initial consideration of around €80 million, settled in cash upon completion.
The outstanding shares are valued at approximately €295 million in equity value, and alongside the initial consideration, the maximum earn-out payments will become payable in 2022 and 2023 at a total €11 million, subject to Relax Gaming achieving certain revenue thresholds.
Furthermore, the transaction – which will also enhance Kindred’s product control and differentiation capabilities – will be financed through the NASDAQ Stockholm gambling group’s existing cash and credit facilities.
Kindred’s long-term ambition is to maintain investment in Relax Gaming to further strengthen the firm’s product offering and expand its B2B customer base, which will subsequently cement its own position as a leading B2B igaming supplier.
Henrik Tjärnström, CEO at Kindred Group, remarked: “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.”
Furthermore, Relax Gaming will continue to operate as an independent entity within Kindred Group, with a separate Board of Directors and management team, with the objective of securing the continued integrity of the company’s B2B customers.
All existing employee share option programmes in Relax Gaming will be exercised, the firm’s management will retain ownership of 7% of total fully diluted shares in the company, whilst Kindred’s ownership will stand at 93% after the completion of the transaction and the exercise of the options.
Annual run-rate synergies of €8 million are expected within the next three years as a result of the acquisition, driven especially by lower investment needs and reduced cost of sales.
“Joining Kindred Group comes as a natural next step in our long-standing cooperation with Kindred across all our product verticals,” added Patrik Österåker, Co-Founder and Chairman of the Board at Relax Gaming.
“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.”
The takeover represents a further expansion of Kindred’s igaming operations following the announcement last week that its 32Red online casino platform went live with a bespoke version of the Fast Track CRM platform.