Cherry ups stake in Game Lounge
Nordic operator takes stake in affiliate firm up to 95% in total
Cherry has exercised its option to buy further shares in affiliate firm Game Lounge, acquiring an additional 44% of the company.
The price, although not disclosed, was based on a multiple of 4.5x the 2017 profit of the firm’s affiliate operation and 6x the 2017 profit of the white label operation.
The deal means Cherry will own 95% of the firm after acquiring 51% for £3.4m back in January 2015.
“Game Lounge holds a strong position in a growing market,” said Anders Holmgren, CEO of Cherry.
“In the third quarter 2017, Game Lounge continued to grow, and revenue amounted to MSEK 45 (£4m), an increase of 180% compared with the third quarter of 2016. EBITDA margin amounted to 75%.
“Game Lounge’s business model is remarkably scalable, the company has unique capabilities in search-engine optimization and is the recognized standard in affiliation within the gaming industry and we see great potential to expand the scope of the business to also include other segments, such as the loan affiliate website Lainat.fi, acquired by Game Lounge in November.”
The remaining 5% in Game Lounge will be held by the founders, who will also stay on as head of sales and CEO, respectively.