Cherry AB to Acquire ComeOn for €280m

May 9th, 2016


Cherry AB to Acquire ComeOn for €280m

Cherry AB has recently reached an agreement to acquire a 49% stake in ComeOn! Malta Ltd., an online betting operator with several casino and sports brands. In the deal, the Swedish online gambling operator has the option to purchase the remaining 51%, keeping further progress on the horizon.

€80m Initial Purchase

For a complete acquisition, Cherry has reported a €280m value for the total consideration. However, the operator will pay a mere €80m consideration for the initial 49% by making payment with a combination of shares (50.4%) and cash (49.6%) in the first tranche.

If Cherry wishes to proceed, the deal will be completed in a second tranche that also combines shares and cash to purchase the final 51%. Cherry must exercise the option between 1 October and 31 December 2016 or ComeOn! will be entitled to repurchase the shares for €40m.

Cherry Eyes Expansion

Discussing the move, Cherry AB CEO Fredrik Burvall explained:

"This acquisition will strengthen Cherry’s position in online gaming against competitors in Scandinavia and other European markets."

Prior to the deal, the operator was best-known for Cherry Casino, with other brands including EuroSlots and NordicSlots.

ComeOn! is currently licensed to operate in the UK, Malta and Curacao, so Cherry will have yet more brands to promote. ComeOn! is the operator’s flagship site, but there are others, such as Casino Stugan, Get Lucky and MobilBet.

In making the announcement, it was revealed ComeOn! has approximately 1.11 million registered customers, of which approximately 133,000 were active as of December 2015. From the outset, Cherry will have access to a larger customer base as it tries to expand.

Cherry appears to be acquiring a healthy company, as ComeOn! reported a 60% increase in sales to almost €80m for 2015. In 2016, ComeOn! has estimated further increases to €100m - €120m sales and €19m - €23m operating profit.

Acquisition Awaiting Approval

Before expansion can happen, Cherry’s shareholders will first have to agree on the deal. In the official announcement, it was speculated a shareholders’ meeting would be scheduled for late May or early June 2016. The meeting’s notice will be published no later than four weeks before the eventual date agreed upon.

At the meeting, shareholders will learn how Cherry’s executive management team has created a deal that will be completed on a debt-free basis. In addition, it has been stated a broader online gambling portfolio will create synergies in the form of reduced costs for payment solutions and software providers plus shared marketing efforts.

Crucially, the deal will cause no redundancies at Cherry or for ComeOn!’s 210 employees. Burvall described both companies as "growing considerably faster than the market as a whole," which seems to have negated a need to downsize.

Cherry Customers to Benefit

When the deal is completed, Cherry expects its current customers will benefit from access to a sportsbook like ComeOn!. In terms of scale, the site accounted for close to one third of the operator’s 2015 revenue.

Meanwhile, both operators will also be able to combine gaming software as well as marketing resources. This could take the form of introducing new games across all sites and hosting more rewarding promotional events and offers. ComeOn! currently touts a NetEntertainment partnership, something Cherry is sure to appreciate.

To enjoy all that Cherry is bringing to ComeOn!, create an account with ComeOn! Casino today!

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