Betsson AB (STO:BETSB) has today entered into an agreement to acquire the brands Sverigeautomaten.com, Norgesautomaten.com and Danmarksautomaten.com from Cherry, for a consideration of SEK 286 million, of which SEK 60 million constitutes an additional purchase price. In practice, the deal implies that Betsson AB’s subsidiary in Malta, which already today is responsible for the operation of the Automaten sites, now also takes over the brands and the responsibility for the external marketing of the brands. Simultaneously, Cherry acquires the brand Cherrycasino.com from Betsson AB’s Maltese subsidiary, for a consideration of SEK 1 million.
The initial net consideration of SEK 225 million will be paid by the delivery of 1,063,895 newly issued Betsson B shares. The additional purchase price will be paid in cash after 12 months.
The Automaten brands delivered revenues in 2012 of SEK 168.2 million, which already are included in Betsson’s total revenues. In total, the deal implies that Betsson, calculated on 2012 levels, makes a yearly saving of SEK 52.7 million in costs corresponding to the net effect of savings of revenue share to Cherry from the previous partner agreement and additional marketing spend to be carried out by Betsson. The deal is hence done on a level corresponding to an EBIT multiple of 5.4 and will give a positive EPS effect from the second quarter 2013.
”The deal is in line with our strategy to focus on B2C in our core markets in the Nordics. Our judgment is that the acquired brands will develop stronger internally because we can use the marketing power and scale advantages of the entire Betsson group.” says Magnus Silfverberg CEO of Betsson AB.
Betsson AB’s Core Business consists of owning and administering shareholdings in companies which, themselves or through partners, offer gaming to the end users via the internet. Betsson AB owns Betsson Malta which operates gaming to the end users either through their own websites or through partnerships. Betsson Malta offers Poker, Casino, Sportsbook, Scratch Cards, Bingo and Games. The customers come primarily from the Scandinavian countries and other parts of Europe. Betsson AB is listed on NASDAQ OMX Nordic Mid Cap List, (BETS).
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