Swedish firm behind PlayCherry.com is set to purchase the operator of NorgesAutomaten.com, SverigeAutomaten.com and DanmarksAutomaten.com.
Friday 12th February 2010
Swedish gaming firm Cherryforetagen AB has announced a deal to acquire Malta-based Coys Limited, which markets online casino brands NorgesAutomaten.com, SverigeAutomaten.com and DanmarksAutomaten.com via subsidiaries.
Cherryforetagen currently operates the PlayCherry.com online gaming site and stated that the purchase would ‘strategically complement’ its existing operations and give it a ‘strong position’ in the Scandinavian market.
For its part, Coys has 55,000 registered customers and markets its online casino games via a ‘white-label’ solution in partnership with Betsson Services Limited. Its operations also extend to over 500 domain names for future growth in Europe with Betsson responsible for technology, customer management and payment processing aspects.
Cherryforetagen revealed that it would pay $6.82 million in cash for Coys along with $1.36 in delayed considerations. In addition, it will issue the sellers with 6.8 million of its own shares to give them a 34 percent stake in its business, although no one investor is to obtain more than 16 percent of its votes. The buyer will also be tied to results-based additional payments over the next three years with Cherryforetagen revealing that it intends to carry out a rights issue in order to finance the acquisition and prepare for upcoming expansion.
“This is a strategically important acquisition that gives Cherryforetagen access to established brands in online gaming and enables it to reach critical mass,” said Gunnar Lind, Chief Executive Officer for Cherryforetagen.
“We see great opportunities for continued expansion in both existing and new geographic markets. From a long-term perspective, we feel that physical games and online games will be linked together, creating new opportunities. Each year, Cherryforetagen provides services to about 50 million players on land and at sea.”
Cherryforetagen revealed that the acquisition is expected to increase turnover this year by approximately $20.43 million while net profits should grow by more than $4.08 million.
“NorgesAutomaten.com, SverigeAutomaten.com and DanmarksAutomaten.com have enjoyed a very positive reception on the market,” said Lorang Andreassen, co-owner of Coys.
“Cherryforetagen has vast experience with traditional casino operations and has proven itself able to develop new deals. We feel that the business will have extremely good conditions for further development in the framework of Cherryforetagen.”
