32Red (LON:TTRL) has agreed an all cash takeover by Kindred, at 196p per share. Together with an approved 4p dividend, this represents a 32.4% premium to last month’s average. This equates to 10.6x EV/EBITDA and 14.3x P/E for 2017, a small premium to the larger peer group. Given 32Red’s brand strength, regulated bias and growth momentum, this appears justified.
10% of enlarged Kindred Group
Kindred Group is a pure online gaming operator with a strategy of entering only regulated or soon-to-be regulated markets. It is domiciled in Malta and its core markets are the Nordic Region and Western Europe. 32Red’s revenues would add c 10% to the enlarged group, increasing total regulated revenues from 35% to 39%. The deal will lead to further scale in the UK, and the ability to leverage 32Red’s brand strength, growth momentum and 3-4% share of the UK Casino Market.
71.1% irrevocable undertakings in place
With 71.1% of shareholder irrevocable undertakings already in place, we expect the deal to proceed according to plan, finalising by late April. Further updates will be provided along with 32Red’s 2016 results on 9 March.
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