The recent acquisition of Highlight Media changes the direction of the company. Adding an affiliate-network to the current operations (pokerloco & casinoloco) sets Net Gaming up for potential synergies which could boost the upcoming revenues compared to Net Gaming’s closest peer Catena Media, which has an operating margin at 47.5 % & EV/EBT at 20.35x while Net Gaming is estimated to have an operating margin at 59.8 % & EV/EBT at 12.8x for 2017e sets Net Gaming up for a revaluation.

Case summary:

  • Online casinos are an underlying key factor for Net Gaming in terms of continued organic growth. The lack of major affiliates operating under the online casino segment makes it essential for Net Gaming to position themselves in the casino-segment by acquiring another affiliate network or by creating affiliates with a focus on online casino.
  • The lack of entry-barriers in the affiliate industry could lead to a margin squeeze. As of today, there are no patents nor laws which, in turn, makes it easy for newcomers to enter the affiliate industry.
  • The report is written in Swedish.

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