Kindred to take full ownership of Relax Gaming for €295m

| By Robert Fletcher
Kindred Group has agreed to acquire the remaining outstanding shares in Relax Gaming, in a deal valuing the B2B igaming supplier at €320m (£275m/$379m).
Kindred Group office

Unibet operator Kindred has been the largest shareholder in Relax since 2013, with a 33.4% holding in the supplier. It will now pay approximately €295m to buy out the remaining 66.6% of shares.

This €295m will be split into an initial consideration of €80m, plus two earn-out payments capped at €113m and payable in 2022 and 2023. The earn-out consideration is subject to Relax meeting certain earnings targets.

Kindred, which said the acquisition would accelerate its strategy to increase its focus on product and customer experience, plans to finance the transaction via existing cash and credit facilities.

“Through this acquisition we add a rapidly growing and profitable B2B business with a world-class product portfolio, giving us greater control over our casino, poker and bingo offering, putting Kindred in a significantly better position to achieve our long-term strategy to increase our focus on product differentiation and customer experience,” Kindred chief executive Henrik Tjärnström said.

Founded in 2010, Relax develops online casino games, supported by an open distribution platform for third-party aggregation as well as proprietary poker and bingo products.

Employing approximately 240 staff four main hubs in Malta, Estonia, Sweden and Serbia, Relax currently supplies poker and bingo content on an exclusive basis to Kindred.

In the 12 months to May 2021, Relax generated €25m in revenue, while its earnings before interest, tax, depreciation and amortisation (EBITDA) reached €10m. 

Kindred’s intention is for Relax to run as an independent entity within the group, with a separate board of directors and management team. Kindred would also continue to invest in Relax to strengthen the supplier’s position in the market by further strengthening its product offering and broadening its B2B customer base. 

All existing employee share option programs in Relax Gaming would be exercised, while the Relax management would retain an ownership of around 7% of fully diluted shares in the supplier, leaving Kindred’s ownership in Relax at 93%.

The acquisition is expected to generate annual run-rate synergies of €8m in the next three years, with Kindred hoping to complete the deal by the fourth quarter of this year, subject to customary regulatory approvals.

“Joining Kindred Group comes as a natural next step in our long-standing cooperation with Kindred across all our product verticals. Kindred’s strengthened presence will allow Relax Gaming to further invest in and accelerate the expansion of our B2B offering across the globe,” Relax co-founder and chairman Patrik Österåker said.

“We will continue the Relax Gaming journey as a separate B2B entity with unchanged product portfolio and overall strategy, staying true to our values and respecting the hard-earned trust of our customers.”

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