Gibraltar-based online gambling operator 32Red has struck a deal to aquire rival online casino operator Roxy Palace for £8.4m.

The deal, which was announced on Tuesday, will see 32Red pay £2m in cash and issue 10m new shares at 64p per share to cover the cost of the acquisition. The Malta-licensed Roxy Palace, which is owned by Hyperlink Media Ltd and Applied Logics Ltd, has around 230k registered players and reported earnings of £1.6m on revenue of £10.1m in 2014.

Roxy Palace earns the bulk of its bones from the UK market, although it has a significant presence in the grey markets of Netherlands and Sweden. For the moment at least, 32Red intends to maintain the Roxy Palace brand “along with maximizing synergies where appropriate.” 32Red says it expects the acquisition to be immediately earnings accretive before synergies.

32Red CEO Ed Ware said the acquisition “fits well with our regulated markets growth strategy.” Ware said his firm has “known and respected [Roxy Palace’s] business for many years and share a number of common values.” Both 32Red and Roxy Palace are based on the Microgaming platform, which Ware believes “will aid in making for a smooth integration.”