NetEnt acquires award-winning casino games developer Red Tiger
NetEnt has opened a new chapter after completing the acquisition of one of its rivals, paying a dazzling £200 million (€223 million) for the fast-growing online slot supplier Red Tiger Gaming Limited. The company acquired by NetEnt brings with it a large portfolio of well-known online casino games and software renowned for its daily jackpot games.
About Red Tiger Gaming Limited
With a focus on the NetEnt Games, I hardly ever play games from different suppliers, but I seriously wonder how I could have missed a brand based in Malta, as large Red Tiger with 170 employees working in Malta, Isle of Man, and Bulgaria. Besides, the acquired software developer has licences in the UK, Malta, Alderney, and Gibraltar and is the winner of a good number of iGaming awards. But I have to admit that this new chapter of NetEnt is an exciting one!
The company was founded in 2014 by a group of industry veterans (Cayetano Gaming) and has a proven track record of casino game development in Europe and Asia. Just like NetEnt, Red Tiger Gaming is entirely committed to regulated markets. The products are certified for numerous jurisdictions as mentioned above.
To get to today’s success, Red Tiger has been developing its games using a proprietary HTML5 framework, allowing the team of designers to add HD graphics and immersive sound. It has also enabled Red Tiger to get to important innovations such as Daily and Ceiling Jackpots, which take player engagement to the next level. Ceiling Jackpots are jackpots that must be paid out before the jackpot reaches a specific amount, while Daily Jackpots are running out of time and must be paid before that happens.
“This is an exciting new stage of the Red Tiger story and we are delighted to become part of the NetEnt group. Accessing NetEnt’s unparalleled distribution network and geographic footprint will unlock new opportunities for Red Tiger and will further accelerate our growth. At Red Tiger we’ll remain focused as always on driving further innovation and we are looking forward to working with NetEnt on how to leverage our combined capabilities to create new products that wow our customers,” said Gavin Hamilton, CEO of Red Tiger.
In 2019, Red Tiger went live with esteemed operators including 888.com, Casumo, Comeon, Danske Spil, Pokerstars, BGO, PAF, and Genesis Global and in 2018 the Red Tiger Games were already launched at LeoVegas and Unibet and I’m sure I’ll spend a few hours there next week to give them a try in order to expand my video slot world.
Over the past few years, NetEnt has invested in a global infrastructure focusing on customer reach with a focus on regulated markets, supporting a platform for scale. The acquisition of Red Tiger gives NetEnt the opportunity to capitalize on its scalable technology to support future growth.
NetEnt pays an initial consideration of approximately £197 million for 100% of the shares of Red Tiger. In addition to the initial purchase consideration, a remaining amount of maximum £23 million may become payable in 2022 on an earn-out basis, subject to Red Tiger’s financial performance over the coming two years. This implies a maximum enterprise value of £223 million, corresponding to an enterprise value multiple of c. 12 times current year EBITDA. NetEnt’s income for the third quarter of 2019 will include approximately SEK 55 million of transaction- and financing-related costs.
Red Tiger’s earnings before interest, taxes, depreciation and amortization (EBITDA) is expected to reach £18 million for the full year 2019. The acquisition is financed primarily through new debt facilities provided by Danske Bank and Nordea.
“I am very pleased to welcome Red Tiger into the NetEnt Group. The acquisition combines two of the leading and most innovative companies in the online gaming industry. We look forward to working with Red Tiger’s fantastic team to enhance our combined global reach and to offer further value to operators and players. The transaction will provide significant revenue synergies across our markets worldwide,” says Therese Hillman, Group CEO of NetEnt.