After previously purchasing 49% stake in ComeOn Malta Ltd, Cherry has confirmed to acquire the remaining 51 % of the shares. As a result of this acquisition, the Swedish online gaming operatoris expected to triple its revenues and become the third largest Nordics-focused private sector gaming company. This significantpurchase is also expected to deliver a sound basis for continued international expansion with strong brands.
Improving the Results/Incomes
Chery’s combined pro forma revenues for the third quarter of 2016 totalled SEK 475 million with an EBITDA of SEK 109 million. The Cherry Group claims that with this acquisitionit could generate total revenues for the entireyear 2017, of between SEK 2,600 and SEK 2,700 million, with an EBITDA of SEK 550 to SEK 600 million.
Cherry Strengthentheir Position in the Market
When asked about the Cherry’s latest acquisition, Fredrik Burvall, Cherry President and CEO,commented: “We are very pleased to be able to now conclude the acquisition of ComeOn, which means that we considerably strengthen our position in the market. Together we will create an entrepreneurial-driven gaming company where both Cherry and ComeOn have significantly stronger organic growth than the market, and the acquisition improves the Group’s results considerably.”
“This deal also means that Cherry iGaming will increase its revenues from sports betting.”
He also added that this deal means that Cherry iGaming will increase its revenues from sports betting. Cherry already have a unique income stream diversification from five different business areas along the gaming value chain.
More on the Acquisition Plan
Cherry assumes that the acquisition of the remaining shares in ComeOn Malta Ltd will be concluded by the end of March, 2017. So far, the integration of both companies, which commenced in July 2016, is progressing according to plan.
The total purchase price is based on a multiple of ten times ComeOn’s operating profit (EBIT) for the full year 2016. The initial EUR 80 million portion of the purchase price, will be deducted from the final one, which can be up to a maximum of EUR 280 million on a debt free basis.
Cherry plans to pay the remaining 51 % of the shares in ComeOn Malta Ltd AB with a combination of new shares (40 %) and cash (60 %). The intended new share issue needs to be approved by an extraordinary general meeting, scheduled for February 2017 once the 2016 result for ComeOn is finalised.