Candle Lake Bids SEK132bn to Take Evolution Private

Candle Lake, led by billionaire Kenneth Dart, has proposed a SEK131.7bn offer to take Evolution, a major player in live casino and slots, private. This offer values Evolution at SEK695 per share, despite its current trading price of SEK733, providing the company a market capitalization of SEK138.8bn. Over the last six months, Evolution's stock has surged by 40%, though it still reflects a 9% drop compared to the previous year.

Key Details of the Offer

Candle Lake's acquisition proposal follows its purchase of over two million Evolution shares at SEK695 each on 24 July, surpassing the 30% ownership threshold required under Swedish law to make a full bid. Kenneth Dart's investment firm now holds a 31.56% stake in Evolution. The offer document is scheduled for release around 14 August, with the acceptance period running from 17 August to 15 September.

Financing for the transaction will be sourced from Candle Lake's existing cash reserves, liquid securities, and credit facilities. The firm has also carried out "limited due diligence" on Evolution to support its decision. The UK's Roschier Advokatbyrå acts as Candle Lake’s legal advisor.

Candle Lake’s Strategic Vision

Candle Lake views its involvement in Evolution as a financial investment in a profitable business. "Candle Lake is a long-term investor," stated the firm. "Evolution has become the global leader in B2B live casino solutions." However, the firm expressed no current intention to acquire all outstanding Evolution shares, nor to implement significant operational changes.

Regulatory and Market Considerations

The transaction awaits regulatory clearance and other closing conditions. Evolution has opted not to comment on the offer. The company previously accused Playtech of commissioning a controversial short-seller report in 2021, which has led to an ongoing lawsuit in New Jersey courts.

Background on Kenneth Dart

Candle Lake's owner, Kenneth Dart, is renowned for his significant investments in various sectors, including entertainment giants like Flutter Entertainment. Dart's family amassed wealth through Dart Container, the largest producer of foam cups worldwide, and his net worth is estimated at $3.7bn. A longstanding resident of the Cayman Islands, Dart has a reputation for making strategic investments in controversial sectors like gambling and tobacco.

Recently, Dart increased his footprint in the gaming industry by purchasing a 0.6% stake in Hacksaw Gaming, boosting its stock price by 8% in Stockholm. Evolution's acquisition of Galaxy Gaming was shelved in July, two years after announcing an $85m deal.

Conclusion

Candle Lake's bold offer for Evolution underscores its belief in the latter's market-leading position and operational strength. The industry's eyes are now on how this potential acquisition unfolds, particularly given the lack of any aggressive takeover or operational change claims from Candle Lake.

For detailed insights on similar transactions and industry movements, visit our B2B section.