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Kindred acquires Relax Gaming to strengthen its focus on product differentiation and customer experience
Kindred Group has signed an agreement to acquire the remaining outstanding shares in Relax Gaming, a leading and rapidly growing B2B iGaming supplier, at an implied valuation of up to EUR 320 million for 100 per cent of the shares on a cash free and debt free basis. Kindred has been invested in Relax Gaming since 2013 and the transaction will allow Kindred to acquire the remaining 66.6 per cent of the outstanding shares. The acquisition accelerates Kindred’s strategy to increase its focus on product and customer experience by strengthening Kindred’s product control and product differentiation capabilities.
Kindred Group plc (Kindred) has signed an agreement to acquire the remaining 66.6 per cent of the outstanding shares in Relax Gaming. The transaction values the company at up to EUR 320 million on a cash and debt free basis (Enterprise value) and a total value of the outstanding shares of approximately EUR 295 million (Equity value). Kindred will pay an initial consideration, settled in cash upon completion, of approximately EUR 80 million (on a cash and debt free basis). In addition to the initial consideration, the maximum earn-out payments amount to EUR 113 million and may become payable in 2022 and 2023, subject to Relax Gaming achieving certain earnings thresholds. The transaction will be financed through Kindred’s existing cash and credit facilities.
Relax Gaming is a market leading B2B iGaming software supplier that designs and develops online casino games, supported by an open distribution platform for third party aggregation as well as proprietary poker and bingo products. The company was founded in 2010 and has today c. 240 full-time employees with four main hubs in Malta, Estonia, Sweden and Serbia. Kindred has been invested in Relax Gaming since 2013 and was prior to the transaction the largest owner with 33.4 per cent of the outstanding shares.
“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”, says Henrik Tjärnström, CEO at Kindred Group.
“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”, comments Patrik Österåker, Co-founder and Chairman of the Board at the Relax Gaming.
Relax Gaming currently supplies poker and bingo content on an exclusive basis to Kindred along with high quality casino content. The acquisition is expected to generate annual run-rate synergies of EUR 8 million within the next three years for the Group driven especially by lower investment needs and reduced cost of sales. With Relax Gaming as an important addition to the Group, Kindred will be able to further develop its own proprietary product portfolio, and thereby secure unique content differentiation in line with the Group’s strategic direction.
In order to secure continued integrity of Relax Gaming’s B2B customers, Kindred’s intention is to keep Relax Gaming as an independent entity within the Group with a separate Board of Directors and management team. Kindred’s ambition is to continue to invest in Relax Gaming to cement its position as a leading B2B iGaming supplier by further strengthening Relax Gaming’s product offering and by broadening their B2B customer base. In conjunction with the completion of the transaction, all existing employee share option programs in Relax Gaming will be exercised, and Relax Gaming’s management, who is committed to the future success of the company, will retain an ownership of c. seven per cent of total fully diluted shares in the company and Kindred’s ownership in Relax Gaming will be c. 93 per cent after the completion of the transaction and the exercise of the options.
In the last twelve months leading up to May 2021, Relax Gaming generated revenues of approximately EUR 25 million with an EBITDA of approximately EUR 10 million.
The transaction is conditional to customary regulatory approvals and is expected to be completed in the fourth quarter of 2021.
J.P. Morgan has acted as financial advisor and Cirio Advokatbyrå has acted as legal advisor to Kindred in connection with the transaction.
Roschier Attorneys Ltd acted as the legal advisor to the shareholders of Relax Holding Limited in the transaction.
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Compliance Updates
Why stakeholders must be vocal as part of UKGC consultation on gaming machines
As the UK Gambling Commission announces the launch of its consultation on proposed new rules for gaming machines, Nick Arron, lead partner for the Gambling Team at Poppleston Allen urges stakeholders to ensure they are heard
The UK Gambling Commission this week announced the launch of a 16-week consultation, seeking input on proposed new rules for gaming machines in retail venues.
The consultation focuses on technical standards and related testing strategy and aims to improve consumer protection through a number of proposed changes. The consultation is due to end on May 20.
Nick Arron, lead partner for the Betting and Gambling Team at Poppleston Allen, encouraged stakeholders such as operators and licensees to have their say on what impact these proposed changes will have, including the potential costs.
He said: “Robust stakeholder engagement is an important part of this progress. It’s important that operators have their say so that the regulatory framework balances both consumer safety and industry sustainability.
“Changes will require affected businesses to update their processes and technologies to ensure that any changes are not only implemented by the required date but also properly enforced.
“As this consultation progresses, operators will need to weigh the implications of adopting these new standards, not least the cost. While the intention is to enhance consumer protection, businesses must carefully assess the operational and financial implications of the proposed changes.
“While the Gambling Commission’s initiative is a positive step in prioritising consumer safety, the real challenge will be ensuring that the proposed regulatory adjustments are manageable for businesses already operating under thin margins.”
Tim Miller, Gambling Commission executive director for research and policy, said: “We recognise that regulatory changes that impact the design of machines can come with considerable costs.
“We are encouraging consumers, gambling businesses and other interested groups to share evidence that will assist us in measuring both the likely regulatory impacts of the proposed changes and the likely costs of implementing them.
“This evidence will be invaluable to helping make a robust assessment on whether the benefits to consumers are proportionate to the costs involved.”
The post Why stakeholders must be vocal as part of UKGC consultation on gaming machines appeared first on European Gaming Industry News.
Balkans
Pateplay’s newest partner in Bosnia and Herzegovina
Pateplay is thrilled to unveil its latest strategic partnership with WWin, a premier online operator in Bosnia and Herzegovina.
Martin Yonovski, BDM & CMO at Pateplay, on the collaboration: “Partnering with WWin is a significant step forward for Pateplay. We’re eager to combine our strengths and expertise, and we’re confident this collaboration will open new doors for growth and huge success for both parties”.
Through this alliance, Pateplay is further accelerating its global expansion efforts, poised to achieve extraordinary milestones and deliver unparalleled experiences to players worldwide.
The post Pateplay’s newest partner in Bosnia and Herzegovina appeared first on European Gaming Industry News.
Compliance Updates
GoldenRace fuels growth in Europe with renewed MGA certification
GoldenRace, leading provider of award-winning Virtual Sports and betting solutions, is thrilled to announce the renewal of its Maltese certification, successfully tested by BMM lab and approved by the Malta Gaming Authority (MGA). This renewed certification keeps unlocking opportunities in Romania, Poland, Serbia and other MGA-regulated territories, giving operators a golden ticket to tap into new revenue streams in highly regulated markets.
In Romania, where 88% of the population has internet access, the online gambling market is thriving, offering significant opportunities for operators to attract a tech-savvy audience. Serbia, ranked 8th in Europe for gambling revenue, continues its rapid expansion with over 2,200 betting shops and a flourishing online gambling sector. Meanwhile, Poland’s well-regulated and mature market is a compelling destination for operators seeking sustainable growth.
Any games that have been approved under its newly recertified license in Malta, are also eligible for inclusion under its Class II license in Romania, upon the successful completion of the ONJN approval process. While this certification eases the path in these markets, local regulators may require additional approvals. Operators are advised to present these certifications to their respective regulatory authorities to ensure seamless compliance.
Markets on the rise demand winning content
Compliance may open the door, but content is what keeps players loyal. GoldenRace is helping operators target new demographics and grow market share by offering an incredible portfolio of certified games.
In markets such as Romania and Serbia, football is the main revenue force. GoldenRace continues to dominate this space with its newly certified football games, including its most new football format and games such as Football League, World Cup, Euro tournaments (Champions League & Euro League), La Libertadores and Single Soccer.
With online sports betting making up 58% of Romania’s gambling market and Serbia’s sports betting sector projected to grow by 4.93% between 2025 and 2029, GoldenRace has certified games such as Penalt2Win, Basketball 3×3, Horse and Greyhound racing, MMA (Single & Tournament) and several thrilling motor racing titles, such as Grand Prix Indianapolis 60, Motorbike and Speedway racing.
Eastern Europe’s enduring love for number-based games creates another profitable avenue for operators. Certified games such as Keno & Keno Deluxe, Spin2Win (Royale & American) and Perfect6 are designed to meet the unique preferences of players in these regions.
Insights show that players in Poland and neighboring regions prioritise financial rewards, with 56% listing it as their top motivator for gambling. For those players seeking big payouts potential, Crash Games are leading the charge. After a stellar debut in GoldenRace’s Crashmas campaign, games like Jet Escape, Boom Ball Juggle, Fire Crash, Bank Run and Meteoroid are now part of the certified portfolio.
The post GoldenRace fuels growth in Europe with renewed MGA certification appeared first on European Gaming Industry News.
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