CMA Approves Evolution’s Buy-Over of NetEnt

By Ben Hamill - November 18 2020
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CMA Approves Evolution’s Buy-Over of NetEnt

Live casino gaming and entertainment giant Evolution this week received the final outstanding competition approval required for its acquisition of specialist online casino games developer and distributor NetEnt. Nearly two months after launching an investigation into whether Evolution’s acquisition of NetEnt would disturb the free flow of trade and healthy competition in local markets, the UK’s Competition and Markets Authority (CMA) on November 16 announced its long-awaited approval of the acquisition.

The CMA first announced the launch of the investigation into the $2.25 billion deal earlier this year in September, which in turn saw the live casino provider bump up the deadline for acceptance of the deal by NetEnt’s shareholders from October 30 to November 20.  In the event of a shareholder approval by the time the new deadline has been reached, Evolution may then move to the next step of seeing the acquisition and offer declared unconditional.

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Evolution A Step Closer To Goal

To Evolution, a successful acquisition of NetEnt would represent progress in leaps and bounds in terms the live casino specialist provider’s goal of becoming the number one B2B iGaming supplier in the world. Upon the successful completion of all conditions and shareholder votes, Evolution will own a 90%+ majority stake and control in NetEnt. Evolution’s price-per-share offer represents a premium value offering of 43% - with NetEnt’s board of directors already having voiced their unanimous support of the acquisition.

A definite factor thought to have played a major role in Evolution’s interest in acquiring NetEnt is the latter’s September 2019 acquisition of online slots studio Red Tiger Gaming. The successful acquisition of Red Tiger saw NetEnt post record smashing revenue results for its very first full quarter following the buyout. Of the $59.3 million in revenue posted for the post-acquisition quarter in question, Red Tiger Gaming alone generated a staggering $11.1 million.

Boosted By Q3 Performance

Both Evolution and NetEnt managed to put up stellar performances for the third quarter of 2020.

Evolution saw a massive 48% year-on-year improvement – with a total of $165.8 million reported in quarterly revenue for Q3 of 2020. The third quarter of the year also saw Evolution launch its live casino products in Pennsylvania as well as in Kaunas, Lithuania.

NetEnt too, witnessed a busy Q3 from an operational perspective. NetEnt for the third quarter of the year reported a year-on-year revenue hike of 18% - all the way up to a total of $60.3 million generated in the 3 months leading up to the end of September 2020.

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