One of the market leaders, Evolution Gaming, is alleged to offer no less than $ 2 Billion USD for rivalling slots giant NetEnt (NET Entertainment) in a deal that is designed to further strengthen the position of Evolution Gaming in the US market. Evolution, which is listed on the Stockholm Exchange, has said it’s ambitious SEK19.6B ($2.11B/€1.87B) offer for the casino game developer reconfirms the intention to become “the world leader in the online gaming industry”.
The chairman of NetEnt, Mathias Hedlund, has warm welcomed the offer, which also sees strength in the combination of his group’s reach in online slots and Evolution’s live casino. It would create greater leverage in important expanding markets, like North America.
Strong premium over stock closing price
The offer equates to SEK79.93 per share, which in return represents a premium of 43% over NetEnt’s closing price. It’s even a premium of 72% compared to the volume weighted average price per NetEnt share during the 30 latest trading days. Evolution said that shareholders who together own ± 20% of NetEnt have already preliminary accepted the offer. And the board of directors unanimously recommended other shareholders to provide backing to the bid. Board members who in total directly or indirectly control 8.48% of all shares and 23.20% of all votes in NetEnt have expressed that they intend to undertake to accept the offer.
Benefits for both companies
The benefit lays not only in the strength to enter emerging markets, but it’s also expected to result in strong annual cost savings of approximately €30M, compared to the combined cost basis of NetEnt and Evolution as of the first quarter of 2020.
Evolution said it will publish an offer document on or around 14th of August, with the acceptance period to expire in on 26th of October. The transaction is expected to then be finalised on 2nd of November.
“This strategic deal marks a significant step towards Evolution’s long-term vision of becoming the global market leader in the online casino industry,” Evolution chair Jens von Bahr said.
“The combination of Evolution’s strong offering in live casino with NetEnt’s leading position in online slots will result in a world class portfolio of online games that will enable us to serve a growing customer base. Furthermore, NetEnt’s established US positioning combined with Evolution’s existing US studios and first-to-regulated-market strategy will put us in a favourable position to capitalise on the on-going regulation in North America.”
Evolution Gaming continued stressing, that the US market has the potential to become Evolution Gaming’s largest market over time, as individual states continue to provide better climates due to regulations.
Welcoming the bid, Mathias Hedlund, chairman of NetEnt, added: “Recently, NetEnt has vastly improved its tech and product development capabilities and thereby its growth prospects and at the same time reaching a strong position within the US states that have opened up for online casino.
“With this deal, there are unique possibilities to shape a leading global B2B provider of online casino, taking advantage of the market development with continued digitalisation and strong growth, especially in North America.
“Evolution’s position within live casino combined with NetEnt’s position within online slots will create a company well positioned to take significant market shares. Through this transaction, a new chapter in the development of more entertaining online casino begins, in the best interest of players, operators, employees and shareholders.”