LeoVegas Acquisitions

LeoVegas has during the past two years combed the gaming market in search of companies that fit in with the overall expansion strategy, which is to grow in regulated markets and markets that will soon become regulated.

The M&A process is run by LeoVegas AB and the ultimate responsible is Group CEO, Gustaf Hagman.

M&A Team

In our growing industry, there are fantastic opportunities. Finding interesting acquisitions that fit the Group’s strategy and culture is such opportunity. Due to this we have, in my opinion, built the industry’s strongest M&A team, and together with a strong balance sheet and extra funding, LeoVegas is an interesting buyer in the continued consolidation, comments Gustaf Hagman, Group CEO

Want to get in contact with LeoVegas M&A team?

Feel free to send an email with your questions or if you have an interesting opportunity to share:

Gustaf Hagman, gustaf.hagman@leovegas.com

Philip Doftvik, philip.doftvik@leovegas.com

Axel Lindberg, axel.lindberg@leovegas.com

 

 

Rocket X - January 11th 2018

LeoVegas has signed an agreement to acquire the assets of Rocket X, including top brands such as 21.co.uk, Slotboss, Bet UK and UK Casino.

During the fourth quarter of 2017, Rocket X had revenues of GBP 11.7 million and an adjusted EBITDA* of GBP 3.8 million. The acquisition will be financed from cash at hand and debt for a total purchase price of GBP 65.0 million (EUR 73.5 million).

Rocket X’ strategy focusses on digital and data-driven customer acquisition that incorporates keyword optimisation with multiple brands and customer acquisition sites. As a result, Rocket X operates one of the market’s most effective customer acquisition models. This strategy, which is based on demographic segmentation and targeting, state-of- the-art technology and multiple customer acquisition sites, is optimised so that it can efficiently and effectively reach all potential customers from the online gaming category.

Rocket X currently uses a technical platform from Bede Gaming, and in connection with the acquisition LeoVegas has entered into a services agreement with Bede Gaming. During the due diligence process LeoVegas has determined that Bede’s platform is very advanced from both a technical and product standpoint, thus a very good technology solution for the UK gaming market.

The acquisition will further strengthen LeoVegas’ presence in the UK and its position as the leading mobile operator with 85 employees and local knowledge of the market. Completion of this deal is expected to be made during Q1 2018.

Casinogrounds - December 6th 2017

The LeoVegas mobile gaming group has signed an agreement to acquire 51% of the shares in CasinoGrounds, which owns the streaming network casinogrounds.com.

GameGrounds United AB operates the site www.casinogrounds.com, which in a short time has become a casino streaming platform with an active and social casino forum. The company cooperates both with operators and game makers in the industry. CasinoGrounds had revenue of SEK 4.1 million during the third quarter of 2017, with good profitability. The acquisition initially will not have any significant effect on LeoVegas’ net profit. Casinogrounds Is leading the market within livestreaming of casino games through YouTube and Twitch.

The purchase price is SEK 30 million, with a potential, maximum earn-out payment of SEK 15 million. The acquisition is expected to close on 1 January 2018.

The acquisition of 51% of the shares in CasinoGrounds is being made through LeoVegas’ wholly owned subsidiary LeoVentures Ltd. The purchase price is SEK 30 million, with a potential, maximum earn-out payment of SEK 15 million, which is based on revenue performance during the period January–June 2018. Based on LeoVegas’ assessment, the full earn-out payment will be made. In addition, the agreement includes an option to purchase an additional 29% of the shares in 2021 or 2022 at 5 times operating profit (EBIT multiple).

Royal Panda - 24:e October 2017

The acquisition of Royal Panda strengthens LeoVegas expansion in regulated markets, especially in the UK, and also add a strong and exciting brand to the LeoVegas Group. Royal Panda has a proprietary technical platform focused on casino but they also have a sportsbook and sports offering. At the time of the acquisition, the company had approximately 60 employees and its head office is located in Malta. 50 percent of Royal Panda’s revenues is generated from the UK. The remaining share comes from other Europe and rest of the world. 65 percent of the revenues are generated from mobile devices.

The acquisition gives the LeoVegas Group two great global brands, making the scalability of continued growth tremendous. The acquisition of Royal Panda is in line with LeoVega’s strategy to continue to grow on regulated markets.

The acquisition is being made for a purchase price of EUR 60 m with a possible earn-out payment of an additional EUR 60 m. The total purchase consideration can thus amount to a maximum of EUR 120 m.

In order for Royal Panda to be entitled to the maximum earn-out, the company must achieve:

– At least EUR 50 m in Net Gaming Revenue (NGR)

– EBITDA of at least EUR 15 m

– At least EUR 34 m of NGR must be derived from the UK

– EBITDA from the UK must amount to at least EUR 5 m.

With the acquisition of Royal Panda, LeoVegas can now leave the short-term financial targets for 2018 since the targets were set without taking any major acquisitions into account. The long-term goals can be found in the LeoVegas financial report for the third quarter of 2017.

Winga.it - 21:a February 2017

Winga.it was LeoVegas first acquisition in the company’s history. Winga.it was an Italian gaming operator licensed for the Italian market. The acquisition gave LeoVegas an established position in Europe’s largest regulated gaming market – Italy. Winga.it has been re-branding into LeoVegas and today LeoVegas is the brand that is marketed in Italy.

LeoVegas acquired 100 percent of the company as 2016 had revenues of 8.0 MEUR.

The purchase was made with a cash purchase price of 6.1 MEUR. Which was subsequently adjusted to approximately 5.5 MEUR.

Seller of Winga was PAF (Ålands Penningautomatförening)

Financing

LeoVegas has a strong balance sheet and positive cash flow.

The acquisition of Winga was made with existing cash.

LeoVegas has a strong cash position that was used for the initial purchase price of Royal Panda. But in conjunction to the acquisition and in order to act on future acquisition opportunities, the LeoVegas Group has obtained debt financing of EUR 100 million, of which EUR 40 million constitutes a revolving credit facility.

The financing has a term of three years, and amortisation will commence in the second quarter of 2019 in the amount of EUR 10 m quarterly. The interest rate on financing is approximately 2 percent.

The debt financing ensures that LeoVegas is able to take part in the consolidation within the industry.