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Evolution Gaming Looking to Buy NetEnt for $2.12 Billion

James Guill

If you have played Live Dealer games at online casinos in Australia, you have run across games from Evolution Gaming. The company is the premier provider of Live Dealer online casino games around the world. Now, the company is looking to purchase another giant in the gaming industry to expand its global reach.

According to Nasdaq and other sources, Evolution Gaming has offered to buy all shares of NetEnt at a cost of $2.12 billion. This would make Evolution Gaming the premier leader for all online casino gaming.

Evolution Looking to Buy Out NetEnt

Last week, Nasdaq reported that Evolution Gaming Group AB EVOT.ST is looking to buy NetEnt AB for 19.6 billion Swedish Crowns, or $2.12 billion USD. If the deal is agreed to, that would equal to about 79.93 crowns per share. When the story was reported, that represented a 43% premium on NetEnt’s stock.

NetEnt shareholders will receive .1306 Evolution Gaming shares for every NetEnt share owned. According to reports, several significant shareholders are looking to accept the offer. Their shares equal around 45% of the total shares.

According to NetEnt Chairman Mathias Hedlund, Evolution’s position within Live Casino combined with NetEnt’s position within online slots will create a company well positioned to take significant market shares.”

Move Will Position Evolution Gaming to Be Global Leader

This is a significant move for Evolution, poising the new company to become a global leader in B2B online casino gaming. According to Hedlund, “With this deal, there are unique possibilities to shape a leading global B2B provider of online casino, taking advantage of the market development with continued digitalization and strong growth, especially in North America. Evolution’s position within Live Casino combined with NetEnt’s position within online slots will create a company well-positioned to take significant market share.

One should pay close attention to the attention that Hedlund is placing on North America, as online gambling in the United States has been ramping up over the last couple of years. Multiple states are legalizing online gambling, and the US market will be a highly competitive one. Both companies already have a prescience in multiple states, most notably New Jersey.

The good news is that Evolution doesn’t see any significant changes coming in terms of workforce. Evolution says it is not looking to change much of the combined workforce, likely looking forward to expansion rather than contraction. Presently, Evolution is has a value of around $11 billion.

Is This a Good Move for Evolution?

The reaction to this move has been mixed. When initially announced, Evolution stocks took a tumble, but that is not an unusual occurrence for this type of deal. However, some people believe that Evolution is making a bad move at this time.

The deal would see Evolution Gaming acquire all pokies gaming from NetEnt.

On to the detractors include Regulus Partners of London. They believe that the deal with NetEnt is a poor decision and will cause Evolution to dilute their Live Casino business. According to Regulus, “We have written several times that the strongest gambling companies, whether B2B or B2C, are typically very good at just one thing. And the operational dexterity needed for effective multi-tasking has historically eluded the sector.”

From our viewpoint, we do have concerns regarding Evolution trying to expand too quickly. However, with the current global pandemic, this could be a good time to make this move. With online gambling exploding around the world, this move could help Evolution position itself as a premier online gambling company. Also, the move may help it emerge from the pandemic as a “must-have” operator for current and future online casinos.

The deal still needs approval from shareholders, with NetEnt’s board of directors recommending the deal move forward.