Evolution On Fast Track To Acquire NetEnt
Posted on November 20, 2020 at 3:11am
Huge news making headlines this week is that live casino provider Evolution has successfully secured the approval of the U.K.’s Competition and Markets Authority (CMA) in respect of its intended acquisition of iGaming giant NetEnt. The approval by the CMA marks the final outstanding approval required in order for the massive acquisition deal to be completed by the two industry titans.
Issued on November 16, the CMA took nearly two months completing its investigation of the deal so as to ensure no negative impact on local markets as a result of the two online casino companies coming together under a unified corporate ownership. The authority’s main order of business is that of safeguarding free trade and commercial flow in the country.
The formal regulatory investigation of the $2.25 billion deal was announced in September. The protracted timeframe for completion necessitated an extension of the initial shareholder approvals deadline initially set for October 30, to November 20. Now that the approval has been sealed and secured the voting process can proceed unhindered and without any further delays, Evolution has confirmed.
Milestone For Evolution
Should Evolution secure the finalisation of the acquisition, the live casino giant will have progressed yet another step closer to its goal of growing to the point of primary B2B iGaming supplier across the regulated world.
Once complete, the buy-out will see Evolution own a minimum stake of 90% ownership in the online casino software developer/supplier. To this end, the offer is equal to a per-share acquisition premium of 43% - an offer reportedly unanimously supported and provisionally accepted by NetEnt’s board of directors.
Deal Is On Scale
The coming together of the two online casino brands certainly represents a massive new dynamic about to enter the industry – and a dynamic arguably only equalled by that of the Flutter Entertainment/TSG deal finalised earlier this year.
Evolution will have spent sufficient time carrying out due diligence investigations and would ultimately have been driven to a significant extent by NetEnt’s acquisition of online games-maker Red Tiger.
This is after all the same deal that saw NetEnt post record revenue figures for the initial quarter following the take-over, as well as year-on-year improvements for every period that has followed. So powerful has the impact of the acquisition of the studio been on the brand’s overall performance and outlook, that a smashing $11.1 million in revenue posted for the post-acquisition quarter – out of a total of ±$60 million – was in fact generated by Red Tiger.
Both online casino companies performed well above expectations during the third quarter of 2020.
Evolution reported a stellar 48% year-on-year improvement – with a total of $165.8 million reported for Q3. Furthermore, they reported expansion progress in leaps and bounds, with the live casino specialist having recently launched brand-new studios across several U.S. states, as well as in Lithuania.
NetEnt, in turn, reported an equally impressive Q3 in terms of revenue generated. The supplier reported an 18% year-on-year quarterly improvement – with revenue reported for Q3 reaching $60.3 million.
Next Step: Settlement
Now that Evolution has secured the final outstanding approval, the next step will be to commence with the settlement procedure. The initial date earmarked for this is December 1st. They will however remain at liberty to extend the settlement date, as well as postpone the anticipated finalisation of the acquisition timeline.
Evolution already as early in the process as September obtained approval from the Malta Competition and Consumer Affairs Authority.
Aside from the unanimous vote of support cast by NetEnt’s board of directors, at least 20% of the supplier’s shareholders have reportedly indicated their intended vote of approval in support of the finalisation of the deal.
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