Preliminary Stages of the Decision
The potential sale of ComeOn is currently in its nascent stages, with no guarantees yet in place. However, the buzz surrounding this possible transaction is palpable, especially given ComeOn’s estimated valuation at 8-9 times its projected EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). This figure reflects the growing interest in the online gambling sector and the strategic positioning of ComeOn within it. As of now, representatives from Cherry, Bridgepoint, and ComeOn have remained tight-lipped, offering no official statements regarding the potential sale. This silence only adds to the intrigue surrounding the situation.
If the sale of ComeOn does materialize, it would mark a significant strategic shift for Cherry. The company originally acquired 100% of ComeOn’s shares for €280 million in 2017, a move that allowed Cherry to tap into the burgeoning online gambling market. Since then, ComeOn has expanded its portfolio to include 15 online casino and sports betting brands across Europe, such as Getlucky and Mobilebet. This diversification has not only increased Cherry’s market reach but has also positioned ComeOn as a formidable player in the online gambling landscape.
Market Challenges
Despite the growth and expansion that Cherry has experienced since acquiring ComeOn, the company has faced a series of challenges that have prompted discussions about a potential sale. One of the most significant hurdles has been the regulatory landscape in Sweden, one of Cherry’s primary markets. In 2019, new regulations were enacted that limited the operational capabilities of online gambling operators, creating a more challenging environment for companies like Cherry and ComeOn.
Germany has also imposed tightened restrictions that have adversely affected Cherry’s online performance. These regulatory challenges have not only impacted revenue but have also forced Cherry to reassess its business strategy. The company has struggled to offload other subsidiaries, such as Yggdrasil, a game developer within its portfolio. The offers received for Yggdrasil have been disappointing, leading Cherry to consider divesting its consumer-focused operations, including ComeOn, in favor of its more successful B2B services.
Potential Market Interest
While the sale of ComeOn remains uncertain, industry insiders speculate that an auction could take place later this year. This potential sale has already attracted attention from various quarters, particularly European-based private equity firms and gambling operators looking to bolster their presence in regulated markets. ComeOn’s significant market share in Sweden, coupled with its recent acquisition of a Dutch online gambling license in 2022, makes it an appealing target for potential buyers.
The interest in ComeOn is not merely about its existing operations; it also reflects a broader trend in the gambling industry where companies are seeking to strengthen their foothold in regulated markets. As the landscape continues to evolve, the potential sale of ComeOn could serve as a pivotal moment for both Cherry and the wider online gambling sector. The outcome of this decision will undoubtedly be watched closely by stakeholders across the industry, as it could set the tone for future transactions and strategic moves within the market.