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Cherry AB Acquires Remaining Shares of Game Lounge
October 22, 2018 Christopher Hohenstein
Gaming, media and entertainment giant, Cherry AB, has acquired the remaining shares in Game Lounge, agency for marketing in the iGaming sector, securing a hundred percent ownership. The holding company had previously owned 95% of the stocks, agreeing to pay additional SEK 260 million to obtain the remainder.
The purchase is divided in three stages, whereby the first part is fixed and totals SEK 100 million in cash. After gaining control of the shares, the operator will pay out additional SEK 60 million to cover the agency’s consolidated EBITDA for the two first quarters in 2019, from January 1st to June 30th.
*Note: In case that the targeted SEK 90 million is not reached within this timespan, the measurement period will be expanded through September 30th, when maximum SEK 150 million should be reached.
The third part of the acquisition requires Game Lounge to increase earnings before interest, taxes, depreciation and amortization, exceeding SEK 300 million for any continuous four calendar quarters between July 1st 2019 and December 31st 2021.
Transaction Approved By A General Meeting
Since the sellers of the last 5% are online marketing experts (read: employees) the transaction is categorized as a related-party, and it must be validated in a general meeting. In essence, Cherry’s Board of Directors will compose a written document of the acquirement and also procure an independent valuation statement.
According to the parent company, the sellers will retain their senior positions and participate in incentive programs within the group. Similarly, the Board is also looking forward to seeing favorable market conditions in the future, exceeding the organization’s objective to achieve a 100 percent retention…
Additionally, Gunnar Lind, acting President and CEO, explained that the ’s businesses had developed effectively since 2014, when the group acquired first shares. As a reminder, former chief executive and president, Anders Holmgren, who was accused of insider trading in June 2018, ed the Board in 2015.
Top-Level Managers at Lisbon Conference 2018
Apart from attending Nordic Conference in Copenhagen, Game Lounge has also been shortlisted in two categories at this year’s EGR Operator Awards. Moreover, three of its most distinguished managers, Philip Gustafsson (Sales), Victoria Sansome (Communication & Retention), and Lena Sciberras (Head of Content) all attended various workshops and networking events at Lisbon Conference, to promote leading casino marketing services, including loan marketing, video production and search engine optimization as well.
The agency currently represents and operates around 150 casino sites in thirteen different markets, followed by a selection of sportsbooks and other brands such as Casino Hawks, Suomi Casino, Norge Casino, Polskie Kasyno, and more.
With Cherry’s excellence in five diversified business areas such as online gaming, game development, online marketing, gaming technology, and restaurant casino, the newly signed agreement should increase the group’s objective to organically grow and continue stable strategic revenue increase, largely dependent on more than 9,250 shareholders.
Source:
“Cherry acquires remaining shares in Game Lounge”, cherry.se, October 17, 2018.
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I thought that the company was going through some hard times after its CEO got arrested for insider trading. It seems that the new management knows what they’re doing… we’ll see how the story unwraps after this acquisition.