Cherry indicates interest in buying remaining ComeOn shares

Cherry Gaming said it is looking at a further bond financing to buy up the remaining shares of ComeOn that it doesn’t already own, after Cherry said its own revenues ex-ComeOn rose 39% over the third-quarter.

Fredrik Burvall, CherryAt the end of July, Cherry bought up a 49% stake in ComeOn and Cherry said that though ComeOn’s revenues were yet to be incorporated into its own numbers, the ComeOn management team was forecasting revenues for the year at SEK1bn (£89.2m).

Cherry’s own revenues for the three months to September came in at SEK214m with EBITDA rising 78% to SEK30.9m. The company said it was examining plans with its financial advisers for a further bond issue if the board should decide to exercise its option to acquire the remaining 51% of ComeOn.

Cherry acquired its original stake in ComeOn in July in a cash and shares deal worth €80m in July, with the cash element of €39.7m being financed through the extension of an existing bond. The company did not say how much the remaining shares would cost.

Chief executive Fredrik Burvall said the strategic sense of the ComeOn acquisition had been proved by its own results in the period since the 49% share had been acquired.

“The acquisition means that Cherry strengthens its position in online gaming and enhances our position against competitors, both in Scandinavia and in other European markets, while adding strong brands.”

It also strengthens Cherry’s position in the sports-betting market given the circa 25% share of revenues ComeOn derives from that vertical. Cherry holds an option to complete the acquisition of the remaining shares until the end of the year.

Another acquisition also enjoyed a booming third-quarter, as the affiliate marketing business Game Lounge, bought in the summer, enjoyed growth of 167% over the quarter and EBITDA rising to SEK6m.

Burvall said that despite the company’s burgeoning size, it remained an agile and entrepreneurial business where flexibility is important. “Our ambition is to continue to grow faster than the market, and we are well prepared to do this, both through organic growth and via acquisitions,” he added.

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