Published by CasinoTopsOnline on July 30, 2015 in Industry News

32red roxy palaceLondon Exchange listed gambling operator 32Red has continued their expansion plans through the acquisition of fellow Microgaming powered competitor Roxy Palace Casino.

Ed Ware, 32Red CEO, said of this expansion strategy: “This acquisition fits well with our regulated markets growth strategy and will allow us to leverage the expertise that the Roxy Palace team has built up over many years in international markets to the combined benefit of the enlarged business. To that end we will continue to support the Roxy Palace brand along with maximising synergies.”

32Red acquired Roxy Palace Casino from Hyperlink Media Ltd and Applied Logics Ltd for total of £8.4 million. It is not a pure cash value deal, 32Red has agreed to pay £2 million in cash and the balance of £6.4 million will be resolved through the issuing of 10 million new shares at a value of £0.64 per share.

Ware is positive that the larger group will see improved revenues and therefore long term value for the shareholder: “We are delighted to have acquired Roxy Palace and we believe this is very beneficial for both our existing and new shareholders.”

There is expected to be a positive short-term effect on the values of 32Red Plc as Roxy Palace showed a profit of £3.4 million in 2014 (over 40% of the total deal value), and has a registered customer database in excess of 230,000. The immediate value add comes from cross marketing between brands and increasing the group’s overall share of wallet per customer.

Given that Roxy Palace Casino is 32Red’s second competitor acquisition in less than a year, they acquired GoWild in September 2014, their half-year trading update on July 22 will certainly be highly scrutinised.