In a strategic move to fortify its position in the European gaming landscape, La Française des Jeux (FDJ) has announced its intention to acquire Kindred Group, the renowned gaming company behind brands like Unibet and 32Red. With an appraisal of SEK 130 ($12.43) per Kindred share and registered on Nasdaq Stockholm, the proposed all-cash tender offer represents a premium of 24% compared to the closing price observed on January 19, 2024.
Stéphane Pallez, Chairwoman and CEO of FDJ, expressed her enthusiasm regarding the acquisition, stating, “I am pleased to announce today the proposed acquisition of Kindred. Fully aligned with our strategy, it will give the Group a diversified and balanced profile, based on several pillars: the monopoly activities, mainly the lottery, on our French historical market and since November, in Ireland, with the acquisition of the Irish lottery operator PLI and online sports betting and gaming activities open to competition in Europe.”
With brands like Unibet and 32Red, Kindred disclosed an impressive £893m ($1.1bn) in revenue in 2023. The combination is anticipated to significantly boost FDJ’s international presence to roughly 20% of its gross gaming revenue (GGR), up from the current 6%.
This acquisition follows FDJ’s successful purchase of Premier Lotteries Ireland in November 2023, a €380 million deal aimed at strengthening FDJ’s international presence as a lottery and online gaming operator. Furthermore, FDJ disclosed strong financial performance, achieving €586 million in revenue for the third quarter of 2023, thereby contributing to a cumulative year-to-date total of €1.88 billion.
Kindred’s Board of Directors supported the proposed acquisition with five key shareholders, representing 27.9% of the capital, already expressing their intent to tender their shares. The transaction, which is subject to regulatory approvals and FDJ securing at least 90% of Kindred’s capital, is slated to commence on February 19, 2024. Both available cash and a bridge loan made possible by French banks will be used by FDJ to finance the acquisition. A mid-term net debt to recurring EBITDA ratio of ≤2x is the company’s reaffirmed commitment.
The consolidated group anticipates substantial value creation, foreseeing a more than 10% accretion in dividend per share starting in the 2025 financial year, to be disbursed in 2026. This ambitious move positions FDJ as a major player in the evolving landscape of European gaming, signaling exciting prospects for both companies and their stakeholders.
