Great Stride has big ambitions for 20% of UK bingo market

Great Stride has big ambitions for 20% of UK bingo market

Tuesday, August 2, 2016 Posted by Andy McCarron
Eitan Boyd has his sights set on being a major player in the UK bingo market

Stride Gaming chief executive Eitan Boyd has his sights set on being a major player in the UK bingo market after his firm announced the acquisition of three business operating in the sector.

Boyd described the transactions as transformational and will see assets from Tarco Ltd, Netboost Media and 8Ball Games Ltd join the Stride group for just over £70m combined. The acquisitions will see Stride instantly takes 10% share in the market, but Boyd is aiming even higher.

He explained: “Our strategy remains focused on building scale and profitability through strong organic growth and further targeted acquisitions, taking advantage of the consolidation opportunities in the industry.

“With a medium-term objective to increase our market share to 15%-20% of the UK online bingo market, we will however seek to expand our presence in existing verticals not only in the UK but also in international regulated markets, as well as look to enter into other soft gaming verticals such as online lotteries and scratch cards.”

Stride is paying £38m for Tarco which has a 3% market share of the UK online bingo market, in a mix of shares and cash, although £22m is based on earn-out targets being met. It has 22 B2C bingo brands and four B2B brands, including Moon Bingo and Robin Hood Bingo. The Netboost business, which has cost Stride £2.2m cash, markets the Tarco sites.

8Ball is an online bingo operator with a 2% market share of the UK online bingo market will cost Stride £12m in cash initially with an earn out figure of £18m to be payable in cash and shares.

Stride has identified £5.5m in cost synergies across the three companies.

Boyd commented: "I am delighted by the proposed acquisition of these leading gaming companies, which expedite our ambition to build Stride Gaming into the market leader in the soft gaming vertical of the online gaming industry. Not only do the acquisitions strongly complement our existing business, but they will also add material scale, deliver operational leverage, and substantial cost and revenue synergies.

“Most significantly, the acquisitions will increase our share of the UK online bingo market to 10%, making Stride Gaming the fourth largest online bingo operator in the UK and our combined 105 brands will represent over 25% of the UK online bingo market by number of sites.

“These transformational transactions follow the successful acquisition of InfiApps in July 2015. Stride Gaming has a proven ability to generate value through undertaking value accretive acquisitions and integrating them into the Group and we are confident that we will be able to repeat the same success and deliver value for all our stakeholders.”

Totally Gaming Says: The industry consolidation continues, with Stride using the markets to raise £27m for these acquisitions. The company is probably right in its assumption that the current PoC tax, compliance and new technological standards will continue to drive sector consolidation, squeezing out smaller operators who have lower margins, providing an opportunity for a scale gaming operator, such as Stride to increase its market share. 

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