Redeye believes that the acquisition of 29.9 percent of Global Gaming shares by Enlabs is a ‘strategic play’ with NinjaCasino brand eyeing up the company.
Redeye explained in their research notes that the purchase of Enlabs’ shares, which was just below the limit for a mandatory bid, was a move to obtain a NinjaCasino brand that has a strong position in Finland and Estonia as well as hopes for relaunch in Sweden.
At SEK 8, which values Global Gaming at SEK 327 m, shares are currently trading, corresponding to an enterprise value of around SEK 240 m.
In the investigation Redeye said: “Based on our estimates for 2020, this gives us an EV/S multiple of about 1.0x, which is well above the sales multiple of 0.7x for Betsson´s acquisition of GiG´s B2C segment. However, we still argue that a complete acquisition of Global Gaming should be viewed as attractive for several reasons.”
The NinjaCasino brand has been closed in Sweden after a finding of ‘serious deficiencies’ in its operations had its licence revoked in June last year.
Continued research notes: “If we elaborate a bit further on the possible relaunch of the NinjaCasino brand in Sweden. We know from our contacts at the Swedish Gaming Authority that there is a limited legal room for SGA to prevent an external company from acquiring the NinjaCasino brand and relaunch it.
“However, having the issue that Global Gaming and Finnplay encountered earlier this year fresh in mind makes us believe that there are risks. The issue was the connection/agreement between Global Gaming´s subsidiary, SafeNet Ltd, and Finnplay meant that the same people behind the revoked license would be involved in the new setup.
“As a result, Enlabs need to be very careful and have a close contact with the SGA so that the company is making the correct setup.”
Redeye believes that a relaunched NinjaCasino brand in Sweden will have a ‘substantial impact’ as the company produced more than SEK 100 m per quarter before the revocation of its licence. It argues that it would still attract between SEK 10-40 m per quarter in sales, initially, despite a fall in brand exposure.