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Cherryforetagen Scandinavian market the target for new strategy

2/1/10 - Cherryforetagen, the land based casino element in Sweden's publicly listed gambling group Cherry, is said to be making moves on the a wider front that includes online operations with its acquisition of Coys, a significant player in the Scandinavian online gambling market.
 
Cherryforetagen is a stablemate to Betsson and Net Entertainment within the Cherry group, which has presumably encouraged its wider ambitions. In February 2008 the company launched an online operation branded PlayCherry.com, which will now be integrated into the Coys operations.
 
These include brands like DanmarksAutomaten, NorgesAutomaten and SverigeAutomaten, which together boast some 55 000 registered customers according to company information releases.
 
Coys has another Cherry Group connection - its white label online casino is provided by Betsson.
 
Talking about the acquisition this week, Cherryföretagen chief executive Gunnar Lind said: “This is a strategically important acquisition which gives Cherry access to established brands in online gaming and enables it to reach critical mass.
 
"We see great opportunities for continued expansion in both existing and new geographic markets. From a long-term perspective, we feel that physical games and online games will be linked together, creating new opportunities.”
 
Coy owners Morten Klein and Lorang Andreassen, who are understood to be both former Cherry Group employees, will remain as part of the Coys management structure.
 
The acquisition could earn a projected increase in turnover for Cherryforetagen of around SEK 150 million this year alone, increasing net profit numbers by some SEK 30 million, calculated on Coy's 2009 results.
 
The consideration paid for Coys will consist of an initial cash payment of  SEK 50 million; payment with shares of Cherryföretagen AB to the value of  6.8 million shares; SEK 10 million in deferred payments and an undisclosed amount to be based on performance over the next three years.



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