This story was published more than 4 years ago.
Game developer NetEnt has announced that they've come to an agreement to purchase fellow slot designer Red Tiger Gaming for £223 million in an all cash transaction.
The agreement will see Red Tiger's owners being paid £200 million up front as well as an additional payment of up to £23 million in 2022. The deal will see Red Tiger, along with their 170 employees becoming part of NetEnt's umbrella, and their expected £18 million EBITDA will contribute to NetEnt's financials immediately.
NetEnt has decided to pay for the deal using debt financed by Nordea and Danske Bank and the purchase has already been completed as of press time.
NetEnt's CEO Therese Hillman spoke about the deal, noting: "I am very pleased to welcome Red Tiger into the NetEnt Group. The acquisition combines two of the leading and most innovative companies in the online gaming industry. We look forward to working with Red Tiger's fantastic team to enhance our combined global reach and to offer further value to operators and players. The transaction will provide significant revenue synergies across our markets worldwide."
Red Tiger CEO Gavin Hamilton added: "This is an exciting new stage of the Red Tiger story and we are delighted to become part of the NetEnt group. Accessing NetEnt's unparalleled distribution network and geographic footprint will unlock new opportunities for Red Tiger and will further accelerate our growth. At Red Tiger we'll remain focused as always on driving further innovation and we are looking forward to working with NetEnt on how to leverage our combined capabilities to create new products that wow our customers."
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Comments
Wow, that's an impressive purchase that I wasn't expecting. It's interesting to see all these betting companies picking up smaller betting companies. I wonder who's next?
sharpe
Wow. I am no CEO or financial controller but paying £223m for a business only making £18m a year seems expensive to me. Unless there is some hidden value there that is potentially a 12+ year payback time. Obviously they must think they can do better but the penny pincher in me is screaming that NetEnt overpaid. The Red Tiger guys though... they are no doubt laughing all the way to the bank! 😂🤑💰💰💰
sharpe
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Wow, it is a surprising news. M&As seem to be going on, or undergoing between game developers. Red Tiger is small but have big potentials. Their recent releases are excellent.
NetEnt paid 10xEBITDA, which is often seen in the growing industry. Wow, Red Tiger employees hit a Jackpot 😀
I was quite surprised to read about this this merger, I want to see what happens with the future Red Tiger games as they were quite distinct and I'm curious how much it will change in the future being a part of Netent group.
Or Netent just buying a smaller business to not be a competition of theirs...!?! I think it's a usual practice in business in general..they would probably generate a lot more profits just not having any competition in a certain region.