The Swedish Kindred Group, formerly known as Unibet Group, has just announced that they’ll be acquiring 32Red, a Microgaming powered online casino brand that includes sports betting, bingo and poker. Whilst the deal has yet to be approved by regulators, the reported buying sum is £175.6 million, which is pretty significant, because it’s reportedly 40% more than the average share price of 32Red shares over the last three months.
Now that the Kindred Group, which owns the Unibet and Maria casino brands, has completed their rebranding, it would appear they are out to expand their business. Most notably the plan is to expand into the UK, one of the biggest gambling markets in Europe. 32Red already focuses on the UK, which makes this a suitable acquisition. It also includes smaller Microgaming-powered online casinos such as the Roxy Palace, which has been acquired by 32Red a few years ago.
This deal is actually the first bigger merger we’ve seen in the industry for a while. Back in 2015 Coral and Ladbrokes merged, followed by Betfair and Paddy Power. And let’s not forget the bidding war between 888 Holdings and GVC Holdings for bwin.party, which GVC eventually won. That merger has only been completed in February 2016 and we’ve not seen big acquisitions in 2016 at all. Though there have been several talks that centred around William Hill, nothing actually came to pass.
The iGaming industry has been moving towards consolidation, however, and we can certainly expect to see more news like this in the future. It’s also likely that the Kindred Group is not yet done with its plans to further expand its business.
Since talks between Kindred and 32Red have been going on all month, shares of the latter have actually seen an increase, making this an opportune moment to seal the deal. Other buyers have apparently been interested in the brand as well, but Kindred has been eyeing the successful Microgaming brand for some time now. Considering that the Pound has seen a loss of value after the Brexit, it seemed to be a good time to enter the market more forcefully.
The deal is expected to be finalized relatively soon and it seems unlikely that regulators will oppose it.