Evolution Gaming Offers to Buy NetEnt

24th June 2020 – Evolution Gaming has announced that it has made a public offer to buy Swedish Online Casino Slots and Live Casino games developer Netent, in a deal worth £1.6bn.

The terms of the deal:

• Evolution offers 0.1306 Evolution shares for each share in NetEnt. Evolution will not increase the offered consideration.
• The Offer values each share in NetEnt to SEK 79.93 and all shares in NetEnt to approximately SEK 19.6 billion.
• The offered consideration represents a premium of 43 per cent compared to the closing price of the NetEnt share of series B on Nasdaq Stockholm on 23 June 2020 (which was the last trading day prior to the announcement of the Offer) and a premium of 72 per cent compared to the volume-weighted average price per NetEnt share of series B on Nasdaq Stockholm during the 30 latest trading days up to and including 23 June 2020.
• The board of directors of NetEnt unanimously recommends the shareholders of NetEnt to accept the Offer.
• Shareholders who in total directly or indirectly control 21.02 percent of all shares and 45.02 per cent of all votes in NetEnt have undertaken to accept the Offer. In addition, certain board members of NetEnt who in total directly or indirectly control 8.48 per cent of all shares and 23.20 per cent of all votes in NetEnt have expressed that they intend to undertake to accept the Offer.
• The completion of the Offer is conditional upon, among other things, the Offer being accepted by shareholders to such an extent that Evolution becomes the owner of more than 90 per cent of the shares in NetEnt (on a fully diluted basis) and that an extraordinary general meeting in Evolution resolves to authorise the board of directors to resolve on the issuance of the number of shares in Evolution that Evolution shall pay as consideration to the shareholders of NetEnt that accept the Offer.
• Shareholders who in total control approximately 32.53 per cent of all shares and votes in Evolution have expressed that they are positive to the Offer and that they intend to vote in favour of the board of directors’ proposal for an authorisation to issue shares.
• Evolution will publish an offer document regarding the Offer on or around 14 August 2020. The acceptance period of the Offer will commence on or around 17 August 2020 and expire on or around 26 October 2020.

Offer Background

This is a landmark deal which will accelerate Evolution’s move towards becoming the world leader in the online gaming industry.

• The merger of Evolution’s leading position in Live Casino with NetEnt’s strong position in online slots will create a best-in-class B2B provider with capacity to drive the digitalisation of the global gaming industry (90 per cent of the global casino industry is still land-based).
• The US market has a potential to become Evolution’s largest market over time as individual states regulate. The merger of Evolution’s existing Live Casino offering through the existing New Jersey studio as well as the planned studios in Pennsylvania and Michigan with NetEnt’s strong US presence in online slots will accelerate this development and fast-track the combined company’s move into the US online gaming market.
• The combined product portfolio will include some of the world’s most popular Live Casino and online slots games and generate revenue upsides through cross-selling and improved distribution via both companies’ customer bases, with closer customer partnerships and additional geographical spread of the companies’ products as result. The range of the combined offer will provide significant upsides to customers and player experience as well as enable new collaborations between world-class development resources.
• The combination is expected to result in annual cost savings of approximately EUR 30 million, compared to the combined cost basis of NetEnt and Evolution as of the first quarter of 2020. This includes the cost savings of approximately SEK 150 million which NetEnt has already disclosed.
• The combined company will become a leading online gaming provider with a strong platform for international growth and expansion, both organic and through additional acquisitions.

Jens von Bahr, Chairman of Evolution, comments:

“This strategic deal marks a significant step towards Evolution’s long-term vision of becoming the global market leader in the online casino industry. 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.”

Mathias Hedlund, Chairman of NetEnt, comments:

“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.”

More Information

More information can be found on the specially built website, https://www.b2bonlinecasino.com/.

You can read NetEnt’s Board of Director’s response here.