Cherry to acquire remaining shares in Game Lounge

Cherry to acquire remaining shares in Game Lounge

Friday, October 19, 2018 Posted by News Team
Deal
Deal must go to a shareholder vote

Cherry has signed an agreement to acquire the remaining shares in the iGaming affiliate business Game Lounge. 

The operator currently owns 95% of the shares in Game Lounge, and has agreed to pay up to SEK260m to acquire the remaining 5%. 

Cherry is to pay an initial SEK100m, due once it gains control of the shares. A further SEK60m is to be paid provided Game Lounge’s earnings before interest, tax, depreciation and amortisation (EBTIDA) exceed SEK90m for the period from January 1st to June 30th, 2019.

Should Game Lounge fail to meet the SEK90m target, the measurement period will be extended to September 30th, 2019, with the company to hit a target of SEK150m. 

Finally, if Game Lounge’s consolidated EBITDA exceeds SEK300m for four consecutive quarters between July 1st 2019 and December 31st 2021, Cherry will pay an additional SEK100m.

Cherry explained that the affiliate’s operations had developed well since Cherry first acquired a stake in the business in 2014, making an outright acquisition a sensible move. 

The acquisition is to go to a shareholder vote before it can be finalised, with this likely to take place at Cherry’s Annual General Meeting.

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