LeoVegas Acquires Royal Panda in Deal Worth Up to €120m

The Swedish online casino has secured a deal to buy all the shares in Web Investments Limited, including the company’s Royal Panda brand, via its wholly-owned subsidiary.

The deal, which will see LeoVegas pay an initial €60m (£53.6m) for the company, also includes a possible earn-out payment of up to an additional €60m. In order to land the deal, LeoVegas announced that it has obtained debt financing of €100m including a revolving credit facility of €40m. The interest rate in the financing deal is believed to be around 2%.

The Royal Panda homepage, which will now be owned by LeoVegas.

The Royal Panda homepage, which will now be owned by LeoVegas.

For Web Investments Limited to be entitled to the full earn-out payment, the Royal Panda company must achieve at least €50m in Net Gaming Revenue (NGR) and earnings before interest, taxes, depreciation, and amortisation of at least €15m. Of that, at least €34m of NGR and £5m of earnings must come from the UK market.

LeoVegas, based in Stockholm, launched in 2011 as a mobile gaming provider but has since risen to become one of the success stories of the UK casino scene. It currently offers games by NetEnt as well as several other software providers. Royal Panda launched in 2014 after initially gaining a license from Malta’s Lotteries and Gaming Authority, before securing a full UK Gambling Commission green light. The deal is expected to go through on the 1st December 2017.

Royal Panda has in a short time built up an efficient business with an exciting and strong brand. This is a major acquisition that we are carrying out following a carefully executed process. Gustaf Hagman, Group CEO of LeoVegas

Gustaf Hagman, Group CEO of LeoVegas, said of the acquisition: “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.”

LeoVegas also announced its Q3 results along with the Web Investments Limited deal. Revenue in the three months to September 30 amounted to €55.6m, up 40% from €39.7m for the same period in 2016. Cash deposits were also up 56%, with 202,980 customers depositing a total of €193 (£172.4m).

However, pre-tax earnings dropped from €9.8m in Q3 of 2016 to €7.6m whilst operating profit also fell from €9.4m to €6.9m. The company did not provide any future forecasts for expected profit or revenue.

For existing LeoVegas and Royal Panda customers, immediately changes to accounts and services would be unexpected.

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Stock image representing that the LeoVegas/Royal Panda deal is agreed

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