Cherry raises stake in Game Lounge to 95%
Cherry has upped its stake in Game Lounge almost three years after it became the majority shareholder of the affiliate operator.
The gaming group bought 51% of shares in Game Lounge in January 2015 and has announced plans to purchase another 44% through a combination of cash and a new issue of shares.
The remaining 5% of shares will be held by the founders of Game Lounge, Jonas Cederholm and Fredrik Langeland, who will also stay on as the company’s chief executive and head of sales, respectively.
Game Lounge recorded a 180% year-on-year revenue increase in Q3 2017, with EBITDA margin at 75%, figures which were influential in Cherry’s decision.
Anders Holmgren, chief executive of Cherry, said: “Game Lounge holds a strong position in a growing market. Game Lounge’s business model is remarkably scalable, the company has unique capabilities in search-engine optimisation (SEO) and is the recognised standard in affiliation within the gaming industry and we see great potential to expand the scope of the business to also include other segments, such as the loan affiliate website Lainat.fi, acquired by Game Lounge in November.”
Cherry said the purchase price is based on a multiple of 4.5 times the 2017 profit of the affiliate operation and six times the 2017 profit of the white label operation.
The transaction is expected to be completed around May 2018.
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