Kindred completes acquisition of Relax Gaming

Prior to the transaction, Kindred Group was the largest owner with 33.4% of the outstanding shares.

2021-10-01

Malta

Reading time 1:30 min

The acquisition is expected to generate annual run-rate synergies of $9.27M within the next three years. Relax Gaming will continue to operate as an independent entity within the group with a separate management team and Board of Directors. Patrik Österåker, the co-founder of Relax Gaming, will remain the Chairman of the Board.

Kindred Group announced on July 2, 2021, that it had entered into an agreement to acquire the remaining 66.6% of the outstanding shares in Relax Gaming, a B2B iGaming software supplier that designs and develops online casino games. Kindred has been invested in Relax Gaming since 2013 and was prior to the transaction the largest owner with 33.4% of the outstanding shares.

The acquisition accelerates Kindred's strategy to increase its focus on product and customer experience by strengthening Kindred's product control and product differentiation capabilities. The acquisition is expected to generate annual run-rate synergies of EUR 8 million (USD $9.27 million) within the next three years for the Group, driven especially by lower investment needs and reduced cost of sales.

In order to secure the continued integrity of Relax Gaming's B2B customers, Kindred's intention is to keep Relax Gaming as an independent entity within the group with a separate management team and Board of Directors. Patrik Österåker, the co-founder of Relax Gaming, will remain the Chairman of the Board.

In conjunction with the completion of the transaction, all existing employee share option programs in Relax Gaming have been exercised, and Relax Gaming's management retains ownership of 7% of the total fully diluted shares in the company. Kindred's ownership in Relax Gaming after the transaction is 93% of the total fully diluted shares.

The transaction values Relax Gaming at up to EUR 320 million (USD $371 million) on a cash and debt-free basis (enterprise value) and a total value of the outstanding shares of approximately EUR 295 million (USD $342 million, equity value). The initial consideration for the remaining outstanding share of approximately EUR 80 million, (USD $92 million), on a cash and debt-free basis, have been settled in cash. In addition to the initial consideration, the maximum earn-out payments amount to EUR 113 million (USD $131 million) and may become payable in 2022 and 2023, subject to Relax Gaming achieving certain earnings thresholds.