Berenberg sees M&A, online shift driving Swedish gaming operators

Evolution Petroleum

07/01/2022 09:52

** Berenberg sees the growing online market and M&A activity
as key drivers in the gambling space as it starts coverage of
four Sweden-listed players: Kindred  KINDsdb.ST  and Kambi
 KAMBI.ST  with "buy", Betsson  BETSb.ST  and Evolution
 EVOG.ST  with "hold"
    ** It says B2B-providers Evolution and Kambi will benefit
from the pandemic-induced structural shift towards online
gambling, as the former supplies both live and random number
generated (RNG) products, while the latter will see more
partnership opportunities with sports-betting operators
    ** The broker adds the trend will also boost B2C-operators
Betsson and Kindred, which generate most of their revenues and
earnings from online products
    ** M&A activity also remains elevated, Berenberg says,
noting all four operators have been involved in M&A as acquirors
in the past year and have stable balance sheets enabling further
M&A
    ** According to the broker, Betsson is the most likely
acquisition target given its ownership of technology, while
Evolution is the least likely due to its size
    ** Berenberg hails Kambi's growth outlook and Kindred's
robust net-cash position, organic and inorganic growth
opportunities
    ** It adds Betsson's growth is being driven primarily by
lower-quality unregulated markets, and notes the market seems
being overly optimistic on Evolution's revenue growth prospects

 (Reporting by Marta Frackowiak)
 ((marta.frackowiak@thomsonreuters.com))