Red Tiger, 2014, is an online provider of games and software for casinos. Some might even say they have just won the jackpot because NetEnt has bought the company in an all-cash deal. The arrangement is for GBP 200 million, plus another GBP 23 million in 2022. NetEnt expects to earn from this acquisition within 2020, which may lead to the GBP 23 million in 2022.
Red Tiger has about 170 employees. These workers live in the Isle of Man, Malta, and Bulgaria. When calculating the worth of the company for 2019, the EBITDA shows interest, taxes, depreciation, and amortization are expected to reach GBP 18 million for just the year.
NetEnt has a vision for online gaming, which the company believes Red Tiger will help them gain. The focus is on global infrastructure where the company has a more significant customer reach in regulated markets. It takes platforms that are supported based on a worldwide scale. NetEnt can capitalize on Red Tiger’s already sound company and help the technology grow to meet their vision.
In a statement, Therese Hillman said she is pleased to bring Red Tiger into NetEnt Group. The merger helps combine two companies that are both leading and innovative in the casino industry. Hillman is the CEO for NetEnt. Her statement also included being able to work with Red Tiger’s team including the operators and players who know and love the Red Tiger brand. Hillman believes significant revenue is gained through the acquisition.
Gavin Hamilton, the current leader of Red Tiger, is also happy with the purchase by NetEnt. He feels it is the next stage for the online software provider and they are ecstatic to be part of the group. NetEnt has a beautiful distribution network, plus the geographic business to help bring new options for Red Tiger. The company should see significant growth in the next few years due to the acquisition.
NetEnt will pay GBP 197 million for 100 percent of the company. After 2022, based on earnings, Red Tiger may see an additional amount of up to GBP 23 million. The amount is based on the performance from 2020 to 2022. The total payout amount could be as much as GBP 223 million. The amount is considered twelve times the estimated earnings for 2019.
With the added income, NetEnt’s third quarter will see a SEK 55 million financial transactions relating to the costs of purchasing Red Tiger. The purchase while a cash deal is happening through Danske Bank and Nordea, which are called debt facilities.
Lazard is part of the arrangement helping the deal as the financial advisor. Cirio Advokatbyra is the legal counsel for NetEnt with regards to the transaction.
NetEnt has been a leader in the digital industry almost since the beginning of online gaming. As a company that started offering online casino products in 1996, just two years after the release of the World Wide Web, they have strived to provide top reasons for players to be happy with online gaming. NetEnt has continued to be a pioneer in the industry making acquisitions and deals to continue their success. The company went public on the NASDAQ Stockholm as a way to keep going and raise money. NetEnt has over 1,000 workers who live in Kiev, Stockholm, Krakow, Malta, Gibraltar, Gothenburg, and New Jersey.
Due to the significant acquisition, NetEnt had to let their intentions become known and to ensure that all companies had a fair chance. Red Tiger is happy with the deal and looking forward to seeing what NetEnt can do for the continued success of both companies. The agreement is also seen as highly favourable and fair ensuring the SEC and other regulatory bodies are content with the acquisition.
Customers will not experience any changes or shake-ups; the two companies are quick to point this out to make sure their customers are content. Already Twitter is alive with a conversation about the merger. Many are happy to learn about the changes, while others have made comments regarding changes they would like to see with Red Tiger.
One particular message asked if the Red Tiger games could gain the bonus features a little easier, with a few more pay lines added to several of the games. NetEnt is well known for having games with superb bonus features, graphics, and anywhere from a few to a hundred pay lines. Perhaps, some changes may happen, but so far no one has responded to the question.
NetEnt and Red Tiger have a new road to forge, with changes that will undoubtedly be seen and help the two companies continue to show an increase in their revenues while offering customer satisfaction as best they can.