The offer is detailed in a statement from NetEnt’s board, released on their website today.
It’s an all share offer. NetEnt shareholders will get 0.1306 shares in Evolution Gaming for every NetEnt share currently held.
The offer values NetEnt at around SEK 80 per share, for a total market cap of SEK 19.6 billion (€1.86 billion). That’s a 43% premium to NetEnt’s last traded share price yesterday.
That premium has disappeared as the share price (unsurprisingly) shot up almost 30% today.
At time of writing, NetEnt’s shares were selling at over SEK 70 each.
NetEnt’s board has unanimously recommended that NetEnt shareholders accept the offer. They pointed out a list of strategic benefits that would be enjoyed by the merged operation.
Key among these were the synergies arising (that old M&A chestnut) from combining a leading live games supplier with a leading slots supplier. Opportunity to capitalise on both firms’ strong presence in the emerging US market was also noted.
It’s a best and final offer that will not be increased.
NetEnt shareholders will have until 26 October to formally accept it. At that point, and subject to regulatory approvals, if Evolution are able to acquire a minimum of 90% of outstanding shares, the deal will be done.
From a live gaming perspective the deal is significant. By late 2020 the industry’s dominant provider (Evolution), will join with another major live games supplier in NetEnt. In addition to their very strong lineup of slot and progressive slot games, NetEnt do supply a range of live dealer games.
The deal will further consolidate Evolution’s position as a leading supplier of live games.
NetEnt’s recently released Blackjack Blitz…part of a recent table/studio overhaul
More significantly, it will also give them more clout in being able to offer clients access to a compelling range of both live games and slots. NetEnt have a suit of over 200 RNG games, currently supplied to over 200 operators. Their slots and progressive slots are industry leading.
This versatility of offering has given Playtech an advantage (against live game pure plays like Evolution) over the years. This advantage will be lost.
Should this deal go ahead it will be Evolution’s second M&A play in recent times. They purchased Ezugi in 2018; a much smaller $12 million cash(+earn out) deal.