Kindred Group to acquire 32Red in £176m deal
Acquisition of the AIM-listed firm will see Kindred "considerably strengthen" its position in the UK market
Kindred Group has agreed a deal to acquire 32Red for £176m as the operator looks to significantly increase its UK footprint and build on its multi-brand strategy.
The deal will see Kindred pay 196p per share for the AIM-listed firm but it is unknown whether 32Red founder, Ed Ware, will remain at the company post-acquisition.
In a statement this morning, Kindred said 32Red represented a strong “strategic and cultural fit” for the company and that the deal would “considerably strengthen” its position in the UK market.
It also said it expects the deal to lead to cost and revenue synergies following the integration of 32Red into the business, with plans to migrate 32Red on to Kindred’s proprietary platform in the future.
Henrik Tjärnström, CEO of Kindred Group, said: “The acquisition of 32Red is consistent with our multi-brand strategy and stated desire to grow our business in regulated and soon to be regulated markets.
“32Red is a high quality, customer-focused business with a similar culture to Kindred’s and we are delighted to welcome 32Red and its team into the Kindred Group and look forward to further developing the brand going forward.”
A recent trading update revealed 32Red’s revenues increased 28% year-on-year in 2016 to £62.3m, with its core Casino business accounting for the bulk of revenues at £58.5m.
Net gaming revenue from Bingo, Poker and Sports was also up 60% year-on-year to £3.8m.
32Red CEO Ed Ware confirmed in an analyst call this morning that the operator derived approximately 75% of its revenues from the UK market.
He added in a statement: “We have consistently and profitably grown 32Red’s market share in the regulated markets of the UK and more recently, Italy.
“The management team at Kindred have a similar business philosophy to our own and we look forward to joining forces with Kindred and continuing our successful growth within the Kindred Group.”
Today’s deal marks the ninth acquisition to be completed by Kindred Group since 2005 and its latest of a business focused predominantly on the UK online gambling market.
In 2015, the operator acquired the online business of Stan James for £19m and is currently home to 13 consumer-facing brands, including its flagship Unibet business.