Shareholders in Evolution have approved an €80m earnout payment to Big Time Gaming (BTG) to be issued as a combination of cash and shares.
The resolution was one of several approved by shareholders at the live casino specialist’s 2023 annual general meeting (AGM) yesterday (4 April).
BTG earnout background
Evolution first agreed to acquire all shares in BTG in April 2021, under a deal which would see the acquired business receive total consideration of up to €450m.On completion of the acquisition in June 2021, initial consideration of €220m was paid up-front to BTG’s owners, consisting of €80m in cash and the remainder in newly issued Evolution shares.
As part of the deal, further earnout payments based on BTG’s EBITDA for the years 2022/23 and 2023/24 would become payable in 2023 and 2024.
The first payment has now been approved at Evolution’s latest AGM, and is expected to consist of total consideration of around €80m, depending on the specific outcome of BTG’s performance.
In 2021, $EVO committed to paying BTG earn-outs totaling up to €230m in 2023 & 2024.
Today, they estimate that €80m of earn-outs will be paid in 2023.
Either the (undisclosed) purchase agreement is more weighted to 2024, or BTG has underperformed the agreed EBITDA guidance. pic.twitter.com/aVldveZn1E
— Ali Gündüz (@gnufs) March 3, 2023
As determined in the original acquisition, BTG’s earnouts will consist of 70% cash and 30% in Evolution shares. For this earnout payment, that is expected to amount to some 215,000 shares, worth somewhere in the region of €24m, with the remaining €56m to be paid in cash.
The maximum amount to be paid to BTG through earnouts was set at €230m at the time of the acquisition, meaning next year’s earnout payment may be up to a further €150m, depending on the brand’s performance.BTG is one of four brands in Evolution’s RNG (slots) division alongside NetEnt, Red Tiger and Nolimit City.
The RNG division generated full-year revenue of €268.4m in 2022, up 16.9% year-on-year and accounting for 18.4% of total revenue.
Other resolutions agreed at the AGM
In addition to BTG’s earnout payment, Evolution shareholders agreed on a number of resolutions at the AGM.
All seven of Evolution’s board members; Jens von Bahr, Joel Citron, Mimi Drake, Jonas Engwall, Ian Livingstone, Sandra Urie and Fredrik Österberg, were re-elected to the board, with von Bahr retaining his position as chairman for the period until the close of next year’s AGM.
Remuneration for board members was agreed upon at €100,000 per member per year, while the chairman is set to receive €400,000 per year.
The board has also been authorised to resolve on acquisitions and transfers of the company’s own shares, in order to enable it to optimise and improve the capital structure of the business.
The shares may be used for financing further acquisitions of other companies, or to hedge or facilitate the settlement of Evolution’s incentive plans.The board has also been authorised to issue shares, warrants and convertibles for the same purposes.
Finally, Evolution will pay a dividend of €2 per share to its shareholders, which is expected to be paid on Monday 17 April.