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Kindred Group founder Anders Ström has not held back in an explosive and exclusive interview with Swedish financial newspaper Dagens industri (DI).

Ström, who co-founded both Kindred and its current sportsbook supplier Kambi, revealed what’s been going on behind the scenes at the Unibet operator following major changes across the business.

Long-serving CEO Henrik Tjärnström resigned with immediate effect on 17 May, leaving Nils Andén to steer the ship as chief executive.

According to Earnings + More, Kindred CCO Anne-Jaap Snijders has now become the latest senior executive to depart this week, while the exit of CFO Johan Wilsby had already been announced.

Here’s five things we learned and translated to English from the entrepreneur’s tell-all DI interview.

1. Tjärnström resignation was a foregone conclusion

Ström told DI that the resignation of Tjärnström last week did not come as a surprise to him.

“It has been clear that what the board wants to do and what Henrik wants to do are not in agreement with each other,” he said, referring to the strategic review which has seen Kindred begin exploring options for a sale – in part or in full – of the business. 

“It is probably best for all parties that he steps down here,” Ström suggested, adding that “it is absolutely necessary for the company to carry out a strategic review.”

Still, in spite of their differences of opinion, Ström insisted there is no bad blood between the duo, who have been friends for 20 years.

“This does not affect my perception of Henrik as a person,” he said, “it’s simply that our perception of what’s best for Kindred differs.

“He told me exactly the same thing in the fall of 2020, when he confronted me with fait accompli. You must be able to distinguish between an opinion and a person. I think that Henrik Tjärnström is a 100% good and nice guy. 

“Now it will be the first time in 20 years that we don’t work in the same company, so when we see each other, we won’t have to talk about work anyway.”

2. Corvex Management a driving force in strategic shift

The decision to enter into a strategic review was driven by Kindred’s largest single shareholder, activist investment group Corvex Management, which increased its stake in the company to 15% also had one of their associates take a seat on Kindred’s board.

“Corvex Management has defined that a review needs to be done and after conversations with them and the work in the selection committee, I share that view,” Ström explained.

“The option to sell does not seem to have gone down well with Henrik Tjärnström and so he has to drop out.

“Immediately when Corvex came in as owner, I contacted them and got to know [founder and director] Keith Meister. 

“He is a tough and demanding but also smart person from whom I have learned a lot. He’s not averse to making money.

“We have a mutual respect for each other and have tough discussions from time to time. However, we completely agree on sales as an alternative,” Ström added.

He also suggested he had been thinking along the same lines as Corvex as far back as 2020, even suggesting to management and the board that Kindred should open itself up to strategic alternatives.

“But I didn’t hear anything back. What I said then was documented by everyone involved,” he said.

3. Kindred has “spread itself too thin”

While Ström believes Kindred “is in a very good operational and structural condition,” he suggests that various initiatives in recent years have seen the business shift away from core priorities.

Among its over-ambitious plans was entry into the US sports betting market, according to Ström, “at a cost of at least $50m per year.”

Further, Kindred’s plan to build its own sportsbook (also at an annual cost of around $50m), was “at odds with the strategy that was nailed down in 2014 when Kambi was snapped up. To me, that is madness,” Ström said.

“For me, who founded the business, was CEO and also chairman until 2020, it is painful to see Kindred’s development.”
Kindred founder and shareholder Anders Ström

Other ill-fated internal projects included a plan to launch its own PAM platform in the US, which has finally launched in New Jersey more than two years later than was originally intended.

Kindred has been made to deal with headwinds following the re-regulation of the Netherlands’ online gambling sector and macroeconomic uncertainty in recent years. Ström suggests that “in that environment you have to be focused.”

“If you are working on 10 projects, you may only need to complete three projects. For me, who founded the business, was CEO and also chairman until 2020, it is painful to see Kindred’s development,” he concluded. 

4. Ström resigned in response to sportsbook development plan

While Kindred said in 2020 that Ström had resigned from his role as chairman in order to devote more time to his other investments and to his family, that wasn’t the whole story.

He revealed to DI that, in fact, Ström stood down after learning of the operator’s plan to develop its own proprietary sportsbook, despite its long-standing deal with Kambi, in which Ström holds a 19.4% shareholding.

“It dawned on me in November 2020 that this happened without my knowledge,” Ström explained, adding that he has “since come to understand that they started this work as early as 2018.”

That the plan had been formed without his knowledge was enough for Ström to decide to call it a day, he said.

“Had I known that the cost of building that sportsbook would come, I would never have agreed to the US venture. I take no responsibility for some of the decisions at the end of my time as chairman because they were taken without the board and CEO informing me.” 

“I take no responsibility for some of the decisions at the end of my time as chairman because they were taken without the board and CEO informing me.” 

While he would not have been able to vote on the matter as a major shareholder in Kambi, he suggested that he “should have been informed. I feel now that it is painful to look back and that I was not given the chance to argue about the pros and cons.”

Kindred should have continued to rely on Kambi’s proven expertise in this area, he suggested.

“I know sportsbook and I see that Kambi builds tomorrow’s while Kindred builds yesterday’s. I can see what skills Kindred is asking for, and that is not the framework for building the sportsbook of the future,” he argued.

In addition, Ström suggested that following his departure from the board, the remaining corporate governance structure was “quite weak” and “lacked industrial competence.”

5. Kindred has already rejected proposals from possible buyers

On leaving the company as its chairman, Ström wrote a letter to Kindred’s board setting out his reasons for doing so.

“The spirit of that letter was that Kindred is a fantastic company and a nugget of gold, but that we are a little too small to manage on our own,” he said. 

“But I thought we were a nugget that someone else would like to have and thought we should talk about a sale of the company. The board and management were completely uninterested in it. 

“I have heard that in 2021 they were approached by at least two actors who were interested, but who were not even invited to discussions. I feel that the best interests of the shareholders were not taken into account.” 

When examining the competitive landscape in which it operated, Kindred’s refusal to take the idea of a sell-off seriously was unforgivable for Ström.

“Bet365 is 10 times bigger, Flutter nine times bigger and Draftkings already three times bigger,” he said. 

“But there are three to four potential buyers of Kindred in North America and as many in Europe. There is no shortage of speculators. But you can’t sit [in Kindred’s HQ] on Regeringsgatan and build the Tower of Babel, it won’t work.”

With Andén now at the helm of Kindred as CEO and Corvex Management continuing to drive the firm’s strategic direction, even “if there is no deal, we as shareholders can still get a good trip out of here,” Ström said.

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