Land-based ex Betsson, Net Ent partner Cherryföretagen buys Coys for Nordic online push 29/01/2010

Jon Parker

CHERRYFORETAGEN, the land-based casino company that with Betsson and Net Entertainment made up Sweden's Cherry Group, has made a push on the Scandinavian market  with the acquisition of Coys, which owns brands including DanmarksAutomaten.com, NorgesAutomaten.com and SverigeAutomaten.com aimed at Denmark, Norway and Sweden respectively.

Cherryföretagen is the land-based casino brand of the Cherry Group that in 2006 split into three: land and maritime-focused Cherryföretagen, which claims to serve 50 million players on land and at sea each year; online operator Betsson; and online gambling software company Net Entertainment, which moved to Sweden’s NasDaq mid-market this month. PlayCherry.com was set up in February 2008 to expand the Cherryföretagen brand online.

Coys markets primarily under the DanmarksAutomaten, NorgesAutomaten and SverigeAutomaten brands, but also owns 500 other domain names, with PlayCherry.com to be “organisationally integrated with the acquired operations,” the company said.

As of 31 December 2009, Coys had approximately 55,000 registered customers. Coys’ white label solution is provided by Betsson.

Cherryföretagen chief executive Gunnar Lind (pictured) said: “This is a strategically important acquisition which gives Cherry access to established brands in online gaming and enable 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.”

The acquisition will see main Coy owners Morten Klein and Lorang Andreassen, both former Cherry Group employees, remain at the company.

It will be funded by a rights issue, and is expected to increase Cherryföretagen turnover by approximately SEK150m ($20.4m, €14.6m, £12.6m) in 2010, and increase net profit by SEK30m, based on 2009 results.

The deal consists of four parts: a SEK50m in cash upon possession; payment with shares of Cherryföretagen AB through a directed share issue to the sellers for 6.8 million shares; SEK10m in delayed considerations; and an as yet unspecified, results-based payment over three years.

In other Scandinavian news recently, PartyGaming signed a deal with Danske Spil to provide the Danish state lottery provider’s poker and casino platform.

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Posted: 29/01/2010