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Cherry Group secures 51 percent stake in Game Lounge affiliate business
Thursday January 29,2015 : CHERRY GROUP ENTERS AFFILIATE SECTOR
Swedish online gambling operator secures 51 percent stake in Game Lounge affiliate business.
The Swedish online gambling group Cherry has entered the affiliate sector of the industry after acquiring a 51 percent stake in affiliate management business Game Lounge Limited.
The deal is expected to widen white label provision opportunities for Cherry using the affiliate firm, with Svea Casino.com an early possibility.
A Cherry spokesman said that Cherry expects the acquisition to help it increase volumes quickly on current brands and through future white label partnerships, as well as acquiring more customers at a significantly lower cost.
It is also expected to increase both Cherry’s revenues and EBIT in the next three years and bring in more than 40,000 new depositing customers, he said.
The consideration paid by Cherry for its stake in the affiliate operation is Euro 1.43 million in cash, and an additional, condition-based, purchase price of up to Euro 2 million to be paid, at the earliest, 13 months after the acquisition where Cherry has the option to pay through shares or cash.
There will be an option for Cherry to acquire 100 percent of the business after three years.
Fredrik Burvall, CEO Cherry, commented in a company statement on the agreement:
"The acquisition of Game Lounge is a significant development for Cherry as we enter into our first white label agreement and give Cherry a stronger position in the affiliate sector.
"It has the potential to increase volumes at a much lower cost, both for Cherry’s current brands and the white label brands. The affiliate market is an important part of the online gaming industry and Cherry continues to strengthen its online business with this acquisition.
“Acquiring a profitable affiliate operation with a team highly skilled in search-engine optimization (SEO) and affiliation will also enable our brands to get strong positions on other affiliate sites and search engines."
Game Lodge CEO Jonas Cederholm, CEO Game Lounge, said "We know from working with Cherry that we will be able to launch SveaCasino.com as a top casino on desktop, mobile and tablet on one of the best platforms in the industry. Our strength within SEO and affiliation and Cherry’s long experience with running online casinos is a good match which will enable us to grow further both within affiliation and through white labels.”
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