Kindred Group completed on Oct. 1 the previously announced acquisition of the remaining outstanding shares of Relax Gaming, a leading and rapidly growing B2B provider iGaming.
The group disclosed on July 2, 2021 that it had entered into an agreement to acquire the remaining 66.6% of the outstanding shares of Relax Gaming.
Relax Gaming is a leading provider of B2B iGaming software that designs and develops online casino games, supported by an open distribution platform for third-party aggregation, as well as proprietary poker and bingo products.
The brand was founded in 2010 and today has around 240 full-time employees with four main centers in Malta, Estonia, Sweden and Serbia. Kindred has been investing in Relax Gaming since 2013 and was prior to the transaction the largest owner with 33.4% of the outstanding shares.
Kindred Group’s strategy
The acquisition accelerates Kindred’s strategy of increasing its focus on the product and customer experience, strengthening Kindred’s product stewardship and product differentiation capabilities.
This purchase is expected to generate annual synergies of 8 million euros over the next three years for the group, driven especially by lower investment needs and reduced cost of sales.
In order to ensure the continued integrity of Relax Gaming’s B2B customers, Kindred’s intention is to maintain 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 as Chairman of the Board of Directors. Kindred’s ambition is to continue to invest in Relax Gaming to consolidate its position as a leading B2B provider iGaming, further enhancing Relax’s product offering and expanding its B2B customer base.
In conjunction with the completion of the transaction, all of Relax Gaming’s existing employee stock option programs have been exercised, and Relax Gaming’s management, which is committed to the company’s future success, retains a seven percent share of the total of the company’s fully diluted shares.
Kindred’s ownership of Relax Gaming after the transaction is 93% of total shares fully diluted.
The appreciation of Relax Gaming
The transaction values Relax Gaming up to €320 million in cash and debt free (company value) and a total value of outstanding shares of approximately €295 million (equity value).
The initial consideration for the remaining outstanding shares of approximately 80 million euros was settled in cash.
In addition to the initial consideration, the maximum capital gain payouts total €113 million and may become payable in 2022 and 2023, subject to Relax Gaming reaching certain earning limits.