On Wednesday, 24 June 2020, Evolution Gaming announced it has offered to buy NetEnt for 19.6 billion Swedish crowns ($2.12 billion), in order to expand its collection of casino games and increase earnings.

WHAT THE OFFER ENTAILS

Evolution Gaming offered 0.1306 shares for each share in NetEnt, valuing each at SEK 79.93 and all shares in the firm to approximately SEK 19.6bn. The offered consideration per share represents a premium of 43 percent compared to the closing price of the NetEnt share of series B on Nasdaq Stockholm on June 23, 2020. 

Evolution Gaming has stated that it will not increase the offer, with an acceptance period to commence on August 17, 2020, and expire around October 26, 2020. Completion of the offer is subject to customary conditions, including regulatory clearances being obtained and the offer being accepted to such extent that Evolution Gaming becomes the owner of shares representing more than 90 percent of the total number of outstanding shares in NetEnt.

There are multiple strategic benefits to NetEnt from merging its operations with Evolution Gaming, as the fusing of the two companies would create a leading B2B provider in online casinos. 

These are the main benefits of NetEnt and Evolution Gaming merging together: 

• The combination will provide substantially increased scale and create a leading supplier of online casino products within Live and slots;
• As part of Evolution Gaming, NetEnt will be able to leverage Evolution Gaming’s strong market position in the Live segment to further strengthen its market position in the slots segment;
• The combination will have significant capabilities to leverage its strong position within the US states that have opened up for online casino;
• The enlarged entity will provide enhanced client and products diversification to better address a changing market environment;
• Combining two world-class technology organizations will provide a robust basis for new and innovative products to the benefit of customers and end-users.

 

NETENT’S RESPONSE

NetEnt’s board of directors believes that the association between the two companies represents a well-defined strategy and a positive move for each of them. Moreover, the share consideration allows NetEnt’s shareholders to take part in the combined accelerated growth story and combination benefits. 

The board of directors unanimously recommends the shareholders of NetEnt to accept the offer.

Mathias Hedlund, chairman of NetEnt, commented on the matter: 
 

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 the online casinos. 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.