Cherry acquires 49% of ComeOn for ?80m
Stockholm-listed firm says acquisition will help boost international expansion plans
Cherry AB has agreed a deal to acquire 49% of the shares in ComeOn Malta for ?80m, which will be paid for with cash and newly-issued shares.
The deal, announced on Monday, also includes an option for Cherry to buy the remaining 51% of the sports betting and casino operator in Q4 2016.
The acquisition will strengthen Cherry’s position in Scandinavian markets and provide “great opportunities for continued international expansion”, according to a statement from the two companies.
The firms also expect to benefit from a broader product and brand portfolio, economies of scale such as reduced costs for payment solutions and game suppliers, and more efficient marketing.
“Both Cherry and ComeOn are growing considerably faster than the market as a whole, which facilitates further investments in existing brands and continued expansion in new markets,” said Cherry CEO Fredrik Burvall.
“We will add several strong brands and will profit from the strong entrepreneurial spirit within ComeOn,” he added.
ComeOn’s sales in 2015 were close to ?80m, an increase of about 60% compared to the previous year, with an operating profit of ?13m.
The business has more than one million registered customers with around 110,000 actives at the end of 2015. Approximately a third of the Malta-based firm’s revenue comes from sports betting.
“Just like us, Cherry is growing quickly with a multi-brand strategy and we see a lot of potential synergies between the companies,” said ComeOn’s spokesperson Hans Martin Nakkim.
“We look forward to staying operationally involved with the new ownership, while still having a big stake in the future growth of the consolidated Cherry.”
The acquisition has to be approved by Cherry shareholders during a meeting scheduled for the end of May or the beginning of June.
Rumours of a major acquisition for Cherry surfaced last week, when the company halted trading in its stock after a 25% surge in share prices in two weeks.
Full financial details of the deal can be found here. Cherry share prices were down 6% to SEK168.5 in early trading on Tuesday.