Cherry AB runs as an online casino and sports betting operation, which has recently added the operator ComeOn. Being a Swedish online betting operator, Cherry has taken its business to the next level, by boosting the Nordic market in a step of acquiring a parent company in an online casino and sports betting site Comeon.com. Cherry was halted last week in trading the shares in Stockholm’s AktieTorget with exchanges when the stock’s value rose to 25% within the past couple weeks. And then on Thursday, the company Cherry announced that it was in the last steps in a major acquisition. Then on Monday, it was confirmed it had made a deal that would acquire 49% of a stake on the ComeOn Malta Ltd, as well as an option in acquiring a remaining 51%.
ComeOn is based out of and holds licenses in Malta, the UK, and in Curacao. It operates with company’s such as Mobilbet.com, CasinoStugan.com, and GetLucky.com. Cherry brought all of ComeOn for 280 million, this being the maximum total consideration. This figure was determined by the 2016 profit, and then this was divided by 10x. In 2015, ComeOn had increased its profit by 70% since the 2014 operating profit. ComeOn has reported that its sales in total are close to 80 million by 2015.
The transaction between ComeOn and Cherry was separated into two tranches, the first of these being that it will cover a 49% stake with the total being 80 million, being half of the estimated purchase price and half of the Cherry shares. Cherry has up to December of this year to use its option in purchasing the remaining 51% stake of ComeOn, and likewise, ComeOn will have the right to purchase the 40 million back from Cherry. An acquisition is required to be approved within the Cherry shareholders meeting by the end of May or the beginning of June. Within this meeting, Cherry says that it is expected that the share in ComeOn’s returns will be around 6 million, assuming that there is a positive response from the shareholders meeting.
It is believed by Cherry that the ComeOn brand is to complement the existing operations, especially in the area of sports betting, as it has been accounted in one-third in ComeOn’s revenue. The synergies are likely to become reality through a more efficient and tactic marketing strategy, and reduce cost of the payment in the solutions, as well as the gaming supplies. The management and the founders at ComeOn are definitely the motivating force behind the business driving forward, and because of this there are no redundancies on the horizon among the current 210-strong payroll and Cherry’s workforce. The CEO of Cherry, Fredrick Burvall has said that these new brands are on the road to strengthening Cherry’s position in the world of online gambling.