Kindred Group to buy 32 Red

The wave of consolidation occurring at the top end of the online gambling industry shows no sign of letting up.

Today the boards of Kindred Group and 32Red announced that they have reached an agreement for Kindred to buy 32Red outright.

The board of AIM listed 32Red have stated their intention to unanimously recommend that their shareholders vote in favour of the deal. Not that they should need too much encouragement to do this, with the all cash purchase offer of 196 pence per share (valuing 32Red at £176 million) representing a 16% premium on yesterday’s closing share price. It is also a very healthy multiple of 32Red’s 2016 earnings (unaudited EBITDA for the year of £9.8m).

Kindred CEO Henrik Tjärnström said of the deal,

“The acquisition of 32Red is consistent with our multi-brand strategy and stated desire to grow our business in regulated and soon to be regulated markets. 32Red is a high quality, customer-focused business with a similar culture to Kindred’s and we are delighted to welcome 32Red and its team into the Kindred Group and look forward to further developing the brand going forward.”

This is not the first move by a Nordic based Igaming group to strengthen their position in the UK market. Earlier this month Betsson announced plans to purchase NetPlay TV.

32Red CEO and founder Ed Ware added the following statement:

“We have consistently and profitably grown 32Red’s market share in the regulated markets of the UK and more recently, Italy. The management team at Kindred have a similar business philosophy to our own and we look forward to joining forces with Kindred and continuing our successful growth within the Kindred Group.”

Whether he will remain at 32Red following the acquisition is not known. What it certain is that he will not need a salary going forward. With a 23% stake in his company he will take home around £40 million cash from the deal.