Kambi last week followed through on its acquisition strategy with the purchase of Danish front-end supplier and long-term partner Shape Games.
The agreement has the potential to cost Kambi as much as €78.1m and will eventually see Shape Games take over front-end responsibility for the Stockholm-listed supplier’s sports betting product.
Below, iGaming NEXT caught up with Kambi CEO Kristian Nylén as he expanded on the rationale behind the deal.iGaming NEXT: Shape generated revenue of €7.6m last year. How will the acquisition impact Kambi revenues going forwards and in which quarter will we see the initial impacts?
Kristian Nylén: It will be consolidated from now more or less, so you will see it in the numbers already in Q3, actually. Long term, I see great potential for revenue synergies. We have customers in the industry in different places, so hopefully we can help each other. For us, this is a very good combination and I think what we can do now is really start focusing in on how we can even tighter integrate the two solutions to give it an even stronger edge.
iGN: Is there much integration work to be done between the two companies or will it be business as usual for Shape?
KN: A great thing is that we actually have two common customers already so I mean we have already done an integration. It will be more about how deep you want to go with it. Longer term, I think we will also look at having just one front end. Obviously, Kambi has its own front end at the moment and for the foreseeable future that has to be the case, because we can’t force existing customers to change. But long term, we will look at having one solution.
iGN: And that one solution will primarily be built from the Shape Games software?
KN: That’s correct.iGN: Are you still looking to do more acquisitions? Which parts of the business are you now looking at having already ticked off front-end customisation?
KN: I’ve been quite clear the whole time but it’s not our main strategy to do acquisitions. It’s more if we find things that we believe are very suitable and a good match for us from all angles, complementing our product and a good cultural fit, and also its very important that the price is right. Then we will do more acquisitions, but it’s not that easy to find the right companies. It is not a given that we will do something more.
iGN: Shape has about 80 staff globally. Will there be a rationalisation process where there is a duplication of roles across both businesses?KN: From our point of view, we bought Shape because they are great at what they’re doing, so I don’t really see a lot of rationalisation on their side. But as I said, going forward – and its not a short-term thing – but at some point, we expect that Shape will take over the front-end work from Kambi as well.
iGN: The purchase price can effectively be doubled based on future earnouts. Could you give some more colour on what those indicators are?
KN: No, but its financial performance, I can give you that much. I will struggle to give you more without giving it to the rest of the market as well.