When the Evolution Gaming Group AB announced 24 June 2020 its intent to purchase all existing shares from shareholders of NetEnt AB, a leading developer of slot games for online casinos, not a few industry experts were left in shock.
Evolution Gaming had always been known as the leading software provider of live dealer games but until that day hadn't made a single move into or showed any intention to enter the online slots market. Such a deal would, to say the least, turn Evolution Gaming into an online gambling powerhouse overnight.
The acquisition offer included both the shares of series A and series B and was worth SEK 19.6bn, approximately 1.5 billion GBP at the time. On 23 November 2020, the offer was declared unconditional after being backed by 97.3% of the total number of votes.
More acquisitions and record quarters
Eighteen months since the NetEnt acquisition and Evolution Gaming stuck to its roadmap like superglue during that time. Therese Hillman, NetEnt's Chief Executive, led the integration of the newly acquired assets into the existing business model. At the same time, NetEnt's live casino division was shut down, which partly helped reduce operating costs by roughly 25 million GBP per year.
Evolution Gaming's move into more verticals than live gaming paid off. In Q1 2021, the company reported a 105% revenue increase driven by its acquisitions of NetEnt and Red Tiger Gaming. Three months later, the group announced that revenue and profit had more than doubled in the first half of its 2021 financial year.
Revenue for the first six months in 2021 rose €492.5m from €243.5m the year before. As per an official statement, the NetEnt acquisition was responsible for €105.2m of the total amount
During that time, Evolution Gaming made headlines with yet another eyebrow-raising acquisition when it completed the takeover of Big Time Gaming for a total of €450m. Both parties agreed to an upfront payment of €220m and earn-out payments of 230m payable in 2023 and 2024.
Big Time Gaming is yet another smart acquisition made by Evolution Gaming's executives. The company didn't only launch some of the most popular online slot games in recent years but revolutionised the industry with its range of MegawaysTM and MegapaysTM slots. These games give players up to 117,649 paylines, or ways, to win, whereas traditional slot games rarely offer more than 253 paylines.
What shareholders can expect in 2022
While Q1 2022 haven't been released yet, Evolution AB shareholders have reason to be excited for this year. In both January and February, the group bought back a total of 811,500 shares within the framework of the repurchase programme to create added shareholder value.
During the same, Evolution Gaming launched Lightning Roulette in New Jersey, extended its US live casino partnership with FanDuel, and showcased 25 brand new casino games, all part of 'THE GREAT 88', an initiative to launch 88 new titles in 2022.
Assuming the Swedish company sticks to its plans, there is little doubt that Evolution Gaming will become the gambling powerhouse it envisions to be this year.
