32Red boss lauds Kindred spirit

32Red boss lauds Kindred spirit

Thursday, March 9, 2017
Ware says acquirer is an ‘excellent’ match

Ed Ware, the chief executive of 32Red, said he was confident that company would continue to grow under the ownership of Kindred Group when the £176m acquisition is completed in the coming weeks.

Ware was speaking after his company reported its final results as an independent entity with revenues rising 28 percent to £62.3m and pre-tax profits up over 500 percent to £1.1m. The largely UK-focused online casino operator said that 77 percent of its revenue came from fully regulated markets including in Italy where the operation achieved profitability for the first time.

Speaking to TotallyGaming.com he said the combination of the two companies was striking. “There aren’t many companies out there that would have been as good a fit as Kindred Group,” he said. “Others might not have understood the culture of the company and the value of the brand. Kindred will strengthen the company, not dismantle it.”

32Red was tipped to struggle when the UK introduced the point of consumption (PoC) tax regime in late 2014 due to historically thin margins but the company has confounded expectations, expanding both revenues and profits in the intervening years.

“The irony is that people thought the introduction of the point of consumption tax in the UK would floor the company,” said Ware, whose company spearheaded the attempt by the Gibraltar Betting and Gaming Association (GBGA) to attempt to persuade the courts to overturn the legislation. “But it actually helped us as we increased revenues and increased the value of the business at the same time.”

Once the deal is completed, Kindred – formerly Unibet - will embark on the task of integrating 32Red with its existing Gibraltar-based Stan James operation. 32Red has been based in Gibraltar since it was formed in 2002. The recommended offer from Kindred was announced in late February.

Paul Leyland, a partner at the gambling consultancy Regulus Partners, said the growth at the company would likely continue under the new owners, helped in part by arrangements with supplier including with Microgaming which supplies casino backend functionality to both companies. “Given Kindred’s betting and multi-national focus - and potential medium-term regulatory headwinds from Sweden - we continue to see the proposed deal being logical and attractive to both parties,” he said.

Totally Gaming says: The logic of the acquisition is clear for all involved. Kindred is gaining a larger footprint in the vital UK market where as many have mentioned the gaming market in particular remains fragmented. The 32Red management and shareholders can be proud of what they achieved building a business which, in the end, has proved its value.

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