Swedish online casino games developer NetEnt AB has announced that it will be significantly reducing its workforce as a result of better-than-expected synergies with the Red Tiger Gaming Limited concern it purchased last autumn.
The Stockholm-headquartered innovator used an official press release to declare that the changes are part of an ongoing restructuring that will allow it ‘to further strengthen competitiveness and increase efficiency’ after spending some £200 million ($246.75 million) in September so as to acquire the complete shareholding of Red Tiger Gaming Limited.
NetEnt AB proclaimed that the redundancies are ‘being implemented to speed up the full integration’ of Red Tiger Gaming Limited and are to see ‘several functions’ relocated with the loss of some 120 full-time positions at its offices in Sweden and Malta. The firm furthermore explained that the move is expected to immediately cost it approximately £2.08 million ($2.44 million) but result in annual savings of around £12.49 million ($14.68 million) beginning from the second half of the year.
Therese Hillman, Chief Executive Officer for NetEnt AB, used the press release to pronounce that the acquisition of Red Tiger Gaming Limited had ‘exceeded expectations’ due to a raft of synergies alongside ‘increased efficiency and economies of scale’. She moreover stated that these had resulted in the online casino games developer updating its predicted annual cost savings by about £8.36 million ($9.82 million) with the firm now anticipating first-quarter net revenues of between £40.94 million ($48.12 million) and £41.78 million ($49.12 million).
Read a statement from Hillman…
“We are now entering the next phase of the integration with Red Tiger Gaming Limited, whose sellers are also becoming shareholders of NetEnt AB. The integration will unleash the full potential of our shared capabilities, create significant efficiency gains in games development and strengthen our position as the market leader in online casino.”
NetEnt AB used a second press release to detail that the success of its acquisition has additionally prompted it to speed up the payment of an earn-out consideration agreed with the original shareholders in Red Tiger Gaming Limited worth some £23 million ($27.03 million). It declared that this transaction is to begin during the second quarter via the issuance of an initial £11.5 million ($13.51 million) tranche of B-shares before being followed in twelve months’ time by an identical instalment.
The developer asserted that these exercises are to result in its issued share capital rising by around 2.5% to approximately $103.43 million ($121.26 million) and encompassing some 6.32 million new B-shares for the original investors in Red Tiger Gaming.