NetEnt Acquires the Software Developer Red Tiger Gaming



Staff member
May 3, 2008
Online casino gambling is one of the fastest-growing industries. New software developing companies appear left and right, and the competition keeps getting better and bigger. Of course, there are those who are still keeping up with the pace and even those that are always one step ahead of the others.

Such is NetEnt, the current leading online software developer that has brought many innovations in the industry, and always stays at the forefront of it. Seeing that Red Tiger Gaming has proved to be a fast-growing online slots supplier in this extremely competitive industry, NetEnt has proposed acquisition, and Red Tiger has accepted it. They have entered in an acquisition agreement two weeks ago.

NetEnt Has Acquired Red Tiger Gaming

Red Tiger Gaming was established in 2014 and has ever since been growing with the speed of light. The company has around 170 employees, considering it operates in Bulgaria, the Isle of Man and Malta. At the beginning of 2019, Red Tiger Gaming introduced its Daily Drop Jackpot network, attached to its popular games, and has announced in August that the network has delivered £2.5 million in prizes.

And while players were happy with the games designed by Red Tiger Gaming, and with the payouts they give, the competition was on the edge. It was only a matter of time for NetEnt to propose an acquisition, seeing Red Tiger Gaming’s success.

Therefore, the giant proposed an all-cash deal with an initial enterprise value of £200 million, with a possible additional amount to be given in 2022, an amount of up to £23 million. The transaction was completed immediately after the signing of the deal, and as NetEnt announced, was expected to be accretive to its EPS in 2020. Red Tiger Gaming's earnings before taxes, interest, amortization and depreciation were expected to reach £18 million for 2019.

NetEnt paid an initial £197 million for 100% of the shares of Red Tiger Gaming, but in addition to the initial purchase, the £23 million would possibly be paid on the basis of an earn-out in 2022, depending on Red Tiger’s financial performance in the upcoming years. All of this, in short, implies that the overall purchase value would be £223 million, in correspondence with the enterprise value multiple of c.12x the current year EBTIDA. Approximately SEK 55 million of NetEnt’s income for the remainder of 2019 would be for transaction and financing related costs.

The acquisition was primarily financed through debt facilities provided by Nordea and Danske Bank to NetEnt. The financial advisor to NetEnt related to the transaction was Lazard, while the legal advisor was Cirio Advokatbyrå.

Moments after the acquisition was announced by NetEnt, the developer invited all investors, analysts and media to a telephone conference on September 6th, which was hosted by Therese Hillman, NetEnt’s CEO. They were all invited to ask any questions they had on the acquisition, and participate in the conference by dialling the three phone numbers for the USA, Sweden and UK, or by clicking on the link that provided a live-stream of the conference call.

Red Tiger Gaming’s Comments on the Deal

Red Tiger Gaming's CEO Gavin Hamilton stated that the acquisition was a new exciting stage for the company's story and they were all delighted to become part of the huge NetEnt Group. He added that having access to NetEnt’s unrivalled geographic footprint and distribution network was expected to unlock brand new opportunities for Red Tiger Gaming and was expected to further accelerate, boost its growth.

Hamilton continued explaining that Red Tiger would remain focused on driving further innovation, as always, so everyone was looking forward to working with the giant on how to leverage their combined capabilities to create brand new wow-inspiring products to their customers.

NetEnt’s Statement on the Acquisition

NetEnt’s Group CEO Therese Hillman said that she was very pleased to welcome Red Tiger Gaming into the NetEnt Group. With the acquisition, two of the industry’s most innovative and leading companies were combined in one. She added that they were looking forward to working with Red Tiger’s incredible team in order to enhance their combined global reach and to offer further value to players and operators equally.

She ended her statement saying that the transaction was expected to provide significant revenue synergies across both their markets worldwide.
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Staff member
May 5, 2008
Really good news and good move from NetEnt!!
NetEnt and RedTiger Gaming are really one of the best game providers out there at the moment!

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