The option to purchase the remaining 66.6 percent of outstanding shares in slot maker Relax Gaming has been exercised by major operator Kindred Group.
The acquisition of Relax accelerates Kindred’s product control and differentiation capabilities, with an implied value of €320 million for 100 percent of the shares — on a cash and debt free basis.
Kindred Group CEO Henrik Tjärnström commented: “Through this acquisition we add a rapidly growing and profitable B2B business with a world-class product portfolio, giving us greater control over our casino, poker and bingo offering, putting Kindred in a significantly better position to achieve our long-term strategy to increase our focus on product differentiation and customer experience.”
Relax Gaming’s co-founder and chairman of the board, Patrik sterker, added: “Joining Kindred Group comes as a natural next step in our long-standing cooperation with Kindred across all our product verticals. Kindred’s strengthened presence will allow Relax Gaming to further invest in and accelerate the expansion of our B2B offering across the globe.
“We will continue the Relax Gaming journey as a separate B2B entity with unchanged product portfolio and overall strategy, staying true to our values and respecting the hard-earned trust of our customers.
“Our continued independence is a key element of the transaction, and I am happy to remain on the board of Relax Gaming.”
Kindred stated that it intends to preserve Relax Gaming as an independent organisation inside the Group, with its own board of directors and management team, in order to ensure the continued integrity of the company’s B2B clients.
Kindred’s goal is to keep investing in Relax Gaming in order to develop the company’s product offering and expand its B2B customer base, cementing its position as a top B2B igaming provider.
All existing employee share option programmes in Relax Gaming will be exercised in connection with the transaction, and Relax Gaming’s management, who are committed to the company’s future success, will retain a 7 percent ownership stake in the company’s total fully diluted shares. After the acquisition is completed and the options are exercised, Kindred’s ownership position in Relax Gaming will be 93 percent.
Estimated annual yield
The acquisition is estimated to yield annual run-rate savings of €8 million for the Group over the next three years, owing to fewer investment requirements and lower cost of sales.
The total value of the issued shares – equity value – is roughly €295 million. Kindred will pay an initial consideration of roughly €80 million, which will be settled in cash upon completion.
Aside from the initial consideration, the maximum earn-out payments will total €11 million and will be paid in 2022 and 2023, assuming Relax Gaming meets certain earnings targets. Kindred’s existing cash and credit facilities will be used to fund the deal.
Kindred’s collaboration with Relax Gaming, which created a series of avatars specifically for the online gaming group’s consumers, was extended earlier this month.