British online gambling operator 32Red announced today that it is to acquire online casino business Roxy Palace for the total amount of £8.4 million. According to the information released, 32Red would pay £2 million in cash and would issue 10 million new shares.
Roxy Palace was founded back in 2002. Currently, it offers over 500 casino games, with blackjack, roulette, video poker, and slots being among those. The online casino brand has more than 230,000 registered players. Similarly to 32Red itself, Roxy Palace is powered by the Microgaming platform.
The online casino reported net revenue of £10.1 million for the year ended December 31, 2014. Furthermore, it generated gross profit of £3.4 million. EBITDA amounted to £1.6 million for 2014.
32Red is to take charge of Roxy Palace via the purchase of Eucalyptus Investment’s issued share capital. The latter entity is a subsidiary of Hyperlink Media Limited and Applied Logics. Once the acquisition deal is completed, 32Red will be the owner of Roxy Palace’s intellectual property rights, customer database, etc.
Ed Ware, Chief Executive Officer of 32Red, said in a statement from earlier today that they are delighted with their latest purchase and believe that it would benefit both their existing and new shareholders. Mr. Ware also pointed out that the two gaming companies share a lot of common values.
As mentioned above, 32Red and Roxy Palace are both powered by the Microgaming platform and this is why the integration is expected to be completed quickly and smoothly.
Mr. Ware further commented that the latest purchase corresponds to his company’s strategy to grow its presence in regulated markets. Furthermore, 32Red will have the opportunity to make use of the experience Roxy Palace “has built up” in various international markets over the years. Thus, both companies will benefit from the enlarged business. In order to achieve this, 32Red is planning to maximize synergies where and when appropriate.
Following the announcement about its latest acquisition, the British gambling operator also confirmed that it would release its trading update for the first half of 2015 on July 22. In 2014, the company reported revenue of £32.1 million and EBITDA of £6 million. Furthermore, the company’s dividend increased 33% over the year to reach 2.4 pence.