32Red acquires Microgaming-powered casino for £8.4m
Operator will pay £2m in cash and remainder in shares for UK and Netherlands-facing online casino Roxy Palace
32Red has struck an agreement to acquire Microgaming-powered online casino Roxy Palace for £8.4m in a part-cash, part-paper deal which will see the firm bolster its UK presence and expand into new European markets.
Roxy Palace, which has 230,000 registered customers, last year posted net gaming revenues of £10.1m and EBITDA of £1.6m. Approximately 50% of Roxy Palace’s revenues are derived from the UK, with the unlicensed markets of Netherlands and Sweden also making significant contributions.
Sellers Hyperlink Media and Applied Logics will receive £1m cash on completion, with two further payments of £0.5m due by 31 December 2016. The remainder will consist of 10,000,000 new shares which are expected to be issued by the end of the week.
32Red will acquire the customer database, intellectual property rights and certain other assets used in connection with Roxy Palace while other services provided by the sellers will continue to be provided.
32Red chief executive Ed Ware said the operator would continue to support the Roxy Palace brand and said the fact that Roxy Palace operates on the same Microgaming platform would help “smooth migration”.
“This acquisition fits well with our regulated markets growth strategy and will allow us to leverage the expertise that the Roxy Palace team has built up over many years in international markets to the combined benefit of the enlarged business,” Ware said.
The acquisition represents 32Red’s second inside 12 months after the firm acquired online casino Go Wild’s UK business in September.
London AIM-listed 32Red’s share price was up 2.92p to 66.92p at the time of writing.