Kindred Group acquires Relax Gaming in a €295 million mega deal
The Kindred Group has made a name for itself as a leading iGaming operator, which includes 9 of the biggest names including Unibet, Maria Casino, and 32Red. As the company expands its online presence and branding, Kindred Group announced it is buying the remaining 66.6% outstanding shares in Relax Gaming, a leading and rapidly growing B2B iGaming supplier.
The acquisition will strengthen both companies, allowing Relax Gaming to be fortified by a larger entity while still retaining its sovereignty. Kindred will gain an important developer and supplier, adding new product offerings to its repertoire.
Founded in 1997 by Anders Ström, Kindred Group is an online gambling operator which consists of 9 brands, among them Unibet, Maria Casino, and 32Red. Over the last 20 years, Kindred has worked to bring together all of these companies to form one of the largest gambling companies in the world.
Based in Malta, the company is over 1,600 employees strong, spread across 62 nations around the world. The Kindred Group has been listed on Nasdaq Stockholm since 2004 and in 2018, made its first entrance into the United States sports betting market by means of a partnership with the Hard Rock Hotel & Casino Atlantic City.
The acquisition of Relax Gaming is a move to expedite Kindred’s strategy to increase its focus on product and customer experience by expanding its product offerings and control over those products.
The massive tech deal stands out considering the large number of alternative game producers that produce much better results such as Oryx Gaming, Push Gaming, and BetConstruct. However, Relax Gaming has made a name for itself through its award-winning suite of proprietary games and also it’s Powered By Relax and Silver Bullet programs.
Founded in 2010, Relax Gaming is a game studio and content aggregation platform for the casino industry that develops and produces online casino games to supply to casinos worldwide.
A leading and award-winning B2B iGaming supplier, Relax Gaming creates slots, table games, bingo, and poker games in their in-house studios to distribute to a wide range of operators and brands in their network.
With a goal of creating content in a rapidly evolving digital landscape, Relax Gaming has quickly expanded its reach, while maintaining standardized pricing, and worked collaboratively with businesses in its industry to provide high-quality aggregated content to its partners.
Kindred Group has been investing in Relax Gaming since 2013 and is currently the largest stakeholder with a 33.4% holding in the supplier. In July 2021, Kindred Group signed an agreement to acquire the remaining 66.6% of the outstanding shares in Relax Gaming.
The transaction values the company at up to €320 million on a cash and debt-free basis (Enterprise value) and a total value of the outstanding shares of approximately €295 million (Equity value). The enterprise value of a corporate entity is the value of a business that is available to all shareholders, while the equity value is a value available only to equity investors.
The agreement and subsequent cash and debt-free transaction values Relax Gaming at up to €320m ($378.9m) with outstanding shares totaling approximately €295m. To get the process started, Kindred will pay an initial consideration of roughly €80 million, followed by earn out payments of up to €113 million.
As Kindred’s supplier of poker, bingo, and online casino content on an exclusive basis, the acquisition of Relax Gaming is expected to generate synergies of €8 million ($9.5 million) with payments to be spread out over the next three years.
“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”, said Kindred Group CEO Henrik Tjärnström.
While continuing to invest in Relax Gaming to fortify the supplier’s position, Kindred plans to allow Relax to run as an independent entity within the group, with a separate board of directors and management team.
The remaining Relax Gaming management personnel will retain a 7% stake at the company and following the completion of the transaction, Kindred will exercise all-employee share option programs.
Patrik Österåker, Co-founder and Chairman of the board at Relax Gaming, commented: “We will continue the Relax Gaming journey as a separate B2B entity with the 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.”
With these two companies working together, it will be interesting to see how the remainder of the transaction plays out. It seems like a winning combination, however, that will broaden Kindred’s collective customer base, improve its products, and affirm its position as a leading gaming supplier.