Cherry Acquires NorgesSpill Gaming

Cherry has announced an agreement to acquire 100% of Malta's Moorgate Media Ltd.

Moorgate Holdings

Moorgate's current holdings include affiliate license agreements in cooperation with Web Resort. The new agreement will also bring the entire domain, customer database and gaming site of NorgesSpill . com into its properties.

Terms

Moorgate Media's shares will be acquired for EUR 4.0 million by Cherry. The deal is expected to have a positive effect on Cherry’s revenues at a level estimated at EUR 0.4 million. EBITDA will receive a boost as well, achieving an estimated EUR 1.2 million annually, with the benefits to be felt from the first quarter of 2016 onwards.

This acquisition will have an effect from the first quarter of 2016 and onwards. Until now, the affiliate business has been accounted for as a cost within Business Area Online Gaming, with the holding set to depreciate as an acquisition over the next five years. Cherry takes NorgesSpill for an additional EUR 0.75 million, which will add another EUR 0.3 million to Cherry’s EBITDA.

The acquisition of Moorgate Media Ltd will be paid as subscription shares in Cherry fixed to the average closing price of those Cherry shares during the period from the 16^th to the 23^rd of December.

The NorgesSpill will be paid in cash, with EUR 0.6 million to be released during the first quarter of Q1 and the remaining EUR 0.15 million to be disbursed at the conclusion of migration of NorgesSpill to the Cherry platform.

Commentary

Cherry CEO Fredrik Burvall commented on his company's pleasure in adding another acquisition that is a key component to expansion that will improve Cherry’s results and cash flow. 

This is another confidence boosting move for Cherry, a company that has been in the news extensively in the past two years. It will be interesting to see what the company has up its sleeve for 2016.