Deal expands LeoVegas footprint in the UK
Royal Panda uses proprietary software but has a BetConstruct-powered sportsbook. The company posted GGR up 61 percent y-o-y at Euro 9.8 million in its most recent quarter, delivering earnings of Euro 3.2 million, almost 70 percent from mobile operations and just under 50 percent from the UK market.
The agreement was unveiled during LeoVegas’ presentation of its Q3-2017 results, and includes a further Euro 60 million in conditional earn-out provisions.
Gustaf Hagman Group CEO of Leo Vegas AB said that the acquisition would increase the LeoVegas footprint in the UK and would retain its branding.
“Royal Panda has in a short time built up an efficient business with an exciting and strong brand,” Hagman said Wednesday. “This is a major acquisition that we are carrying out following a carefully executed process.
“With the help of the strong symbolic value in the panda, the company has built a premium brand among gamers, and we will complement LeoVegas with Royal Panda. This gives us two great brands with global appeal, which makes the scalability in the continued growth strong while strengthening our position in the UK.”
The plan is to complete the acquisition of Royal Panda before the end of 2017.
LeoVegas has obtained debt financing of Euro 100 million, Euro 40 million of which will be made available via a revolving credit facility, Hagman revealed.
LeoVegas reported positive Q3 metrics, advising that Group revenue reached Euro 55 million in the quarter, but that EBITDA was down y-o-y at Euro 7.6 million (Q3 2016: Euro 9.8 million) due to Nasdaq listing expenses and acquisitions.
Hagman took an optimistic view for the fourth quarter, saying:
“During the fourth quarter, we expect marketing in relation to revenue to be higher than in the third quarter. We will most likely reach the highest level during the year as we plan to invest ahead of the Christmas holiday season. With a great acquisition, a good start to the fourth quarter and a continued strong cash position, we continue to have tremendous opportunities going forward.”