Swedish-based provider of casino content NetEnt is looking to take their cooperation with Red Tiger to the next level. It has just introduced some organizational changes including a reduction in the number of employees in Stockholm.
NetEnt has recently acquired Red Tiger and now it look to include promising changes to the existing agreement. The acquisition is just one of the successful milestones for the Swedish company which opens the space for efficiency and additional synergies. As part of the restructuring process, the cooperation of two partners will bring new things to the iGaming market including swift integration of Red Tiger within the Netent Group and relocation of several working positions in Stockholm and Malta.
The previous steps are part of a long-term NetEnt strategy to increase the competitiveness and existing value of the products. Following the modifications, the live casino operator will make annual savings in the amount of SEK 150 million, starting from the second part of 2020. Subsequently, NetEnt will surpass initially planned savings through acquisitions from SEK 150 to SEK 250 per year.
According to the estimation, the restructuring process will result in overall costs of SEK 25 million, which will be classified as non-recurring items and lead to a reduction in first-quarter profit.
NetEnt has also announced that the earn-out option for Red Tiger will be reconsidered through the issues of shares and cash payment. The items had already been reported in the discounted net value, resulting in increased costs for the first quarter of 2020 amounting to SEK 35 million. However, it will not affect a company’s cash flow and NetEnt entire debt will fall by 100 MSEK.
Meanwhile, the world is struggling with the negative effects of the coronavirus outbreak. The Swedish-based operator continues the development process in the same rhythm without major changes. The first quarter of 2020 saw significant revenues for the NetEnt Group which will be in range SEK 490-500 million.
Commenting on the current situation and company's potential, NetEnt Group CEO, Therese Hillman said:
“We are now entering the next phase of the integration with Red Tiger, whose sellers are also becoming shareholders of NetEnt. The integration will unleash the full potential of our shared capabilities, create significant efficiency gains in games development and strengthen our position as the market leader in an online casino”.
About:
NetEnt is a world-leading digital entertainment enterprise that delivers excellent gaming products to online casino companies. It has been in operation since 1996 as a pioneer in developing cutting-edge solutions and immersive games. It is listed on Nasdaq Stockholm and place which gathers more than 1110 people from different locations - Malta, Stockholm, Sofia, Kyiv, Krakow, Gothenburg, Gibraltar and New Jersey.
Source:
“NetEnt integrates Red Tiger to realize further synergies“, netent.com, March 24, 2020.