NetEnt Moves into New Phase of Integration Post Red Tiger Acquisition
Published March 30, 2020 by Lee R
NetEnt is already seeing tremendous benefits from the Red Tiger acquisition, which are being passed on to shareholders.
NetEnt is moving forward with adapting the organizational changes from acquiring key acquisition Red Tiger.
Impact
The changes will reduce the workforce by approximately 120 employees, mainly in Stockholm.
Since the September 2019 acquisition, results have exceeded expectations and provide synergies; efficiency and economies of scale.
Latest Phase
The latest adaptation comes in the form of a restructuring to accelerate the integration within the NetEnt group, and will result in the relocation of 120 full-time positions rendered redundant in Stockholm and Malta.
NetEnt Strategy
NetEnt's improvement strategy going forward is to continuously improve all parts of the business to strengthen competitiveness and increase value creation across the board.
Results
The changes will annually save an estimated SEK 150 million in cash-flow, starting in H2 2020.
The result increased NetEnt potential synergies from its initial estimate of 150m to around SEK 250 million annually.
Costs
Restructuring costs are expected to amount to approximately SEK 25 million, reportable as non-recurring items affecting operating profit for the first quarter of 2020.
Dividends
NetEnt further reported earn-out consideration for the Red Tiger deal as redeemable through a directed issue of new shares and cash payment.
Corona Effect?
As far as the contemporary climate impact, NetEnt’s operations have so far not been negatively affected by Corona, with NetEnt revenue in line with Q1 market expectations in the range of approximately SEK 490-500 million.
NetEnt CEO Speaks
NetEnt CEO Therese Hillman explained NetEnt's next phase of integration with Red Tiger to bring Red Tiger shareholders into the fold:
“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 online casino.”
Outlook
The move should generally serve to continue NetEnt's leading market position providing premium gaming solutions for over nearly 25 years, and benefit prevailing and incoming shareholders alike.
