In Full Swing With Plans To Acquire NetEnt, Evolution

The enormous piece of news that has everyone talking this week is that Evolution, a provider of live casino games, has been successful in obtaining the clearance of the Competition and Markets Authority (CMA) of the United Kingdom in regard to its planned acquisition of iGaming giant NetEnt. The permission granted by the CMA represents the final outstanding approval that is required in order for the two titans of industry to be able to successfully conclude the mammoth purchase agreement.

It took the CMA over two months to finish its examination of the merger, which was issued on November 16. The purpose of the inquiry was to guarantee that the combination of the two online gambling enterprises under the ownership of a single corporation would not have a negative effect on the local markets. The protection of unrestricted commercial activity and open markets is the primary goal of the authority as it relates to its work in the country.

 

In September, it was reported that a formal regulatory investigation will be conducted into the 2.25 billion dollar transaction. Because the completion process is taking so much longer than expected, the date for the initial shareholder approvals, which was originally slated for October 30, has been pushed back to November 20. Evolution has confirmed that the voting process will be able to move on unimpeded and without any additional delays now that the approval has been locked down and secured.

 

Milestone For Evolution

In the event that Evolution is successful in completing the acquisition, the industry powerhouse that specializes in live casinos would have moved one step closer to achieving its objective of becoming the leading B2B iGaming provider across the globe’s regulated markets.

 

When the buyout is finished, Evolution will have a minimum share of 90% ownership in the online casino software developer and supplier. This will give Evolution full control over the company. As a result of this, the offer is equivalent to an acquisition premium of 43% per share, and it is an offer that the board of directors of NetEnt is said to have unanimously endorsed and provisionally accepted.

 

There Is a Chance of a Deal

The merger of the two online casino brands unquestionably signifies a big new dynamic that is going to join the industry. This is a dynamic that may only be rivaled by the Flutter Entertainment/TSG agreement, which was finalized earlier this year and is likely the only other dynamic that can compete with it.

 

It is likely that Evolution will have spent a substantial amount of time doing research as part of their due diligence, which would eventually have been driven to a significant extent by NetEnt’s acquisition of online game developer Red Tiger.

 

After all, this is the same transaction that led to record revenue statistics for NetEnt in the first quarter that followed the takeover, as well as year-on-year advances in each of the subsequent periods. The influence of the acquisition of the studio on the entire performance and outlook of the brand has been so tremendous that Red Tiger was responsible for a staggering $11.1 million in revenue posted for the post-acquisition quarter, out of a total of almost $60 million.

 

Increased Amounts of Success

During the third quarter of 2020, both of the firms that operate online casinos had results that were far better than expected.

 

With a total of $165.8 million recorded for the third quarter, Evolution posted an impressive year-over-year increase of 48%. In addition, they announced expansion momentum that was making leaps and bounds, with the live casino expert just launching brand-new studios across multiple states in the United States as well as in Lithuania.

 

On the other hand, NetEnt posted an equally remarkable quarterly revenue total for the third quarter.  The provider said that their quarterly revenue increased by 18% compared to the same period last year, hitting $60.3 million for the third quarter.

 

The following step is the settlement.

The procedure for payment will need to get underway as soon as possible now that Evolution has been successful in obtaining the very last outstanding approval. The first of December has been designated as the target date for this endeavor. They will, however, keep the option open to push back the date of the settlement and the anticipated completion of the schedule for the acquisition.

 

Evolution was able to acquire approval from the Malta Competition and Consumer Affairs Authority as early in the process as September.

 

In addition to the unanimous vote of approval that was cast by NetEnt’s board of directors in favor of the finalization of the acquisition, it has been reported that at least 20% of the supplier’s shareholders have signaled their intention to vote of approval in support of the conclusion of the transaction.


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