MGM Resorts International announced that it has begun a recommended public tender offer for 100 percent of the shares of LeoVegas AB, the Swedish online gaming operator, for a price of SEK 61 in cash per share, equivalent to a total tender value of approximately $607 million. The acquisition will enable international expansion of the operator’s popular BetMGM U.S. online gaming and sports betting business.
The acquisition will be financed with existing cash and is expected to be accretive to MGM Resorts’ earnings and cash flow per share.
“Our vision is to be the world’s premier gaming entertainment company, and this strategic opportunity with LeoVegas will allow us to continue to grow our reach throughout the world,” said MGM Resorts President and CEO Bill Hornbuckle.
“We have achieved remarkable success with BetMGM in the U.S., and with the acquisition of LeoVegas in Europe we will expand our online gaming presence globally. We believe that this offer creates a compelling opportunity that allows the combined teams of MGM Resorts and LeoVegas to accelerate our global digital gaming growth and fully realize the potential of our omnichannel strategy. We look forward to being able to welcome the LeoVegas team to our MGM Resorts family.”
Founded in 2011 by Gustaf Hagman and Robin Ramm-Ericson, LeoVegas is a leading global online gaming company with licenses in eight jurisdictions, primarily in the Nordics and rest of Europe. LeoVegas generated €393 million in revenue and €48 million in Adjusted EBITDA during the 12 months ended March 31. The business is headquartered in Stockholm with offices in Malta, the U.K. and Milan.
MGM Resorts said the acquisition of LeoVegas will provide a unique opportunity for the company to create a scaled global online gaming business with the following attributes:
- Strategic Opportunities to Accelerate Growth and Product Offerings: “LeoVegas’ online casino and sports betting capabilities and strong customer base outside of the U.S. are expected to further expand MGM Resorts’ presence around the world,” the operator said in a press release.
- Experienced Online Gaming Management Team and Superior Technology Capabilities. “LeoVegas’ management team has demonstrated the ability to develop a robust and scalable technology platform with advanced product offerings,” MGM reported.
- Commitment to Continued Profitable Growth: “LeoVegas has operated profitably as a high-growth platform since 2014,” the operator said. “From 2017 to 2021, LeoVegas’ revenues compounded annual growth rate was 16 percent, while maintaining strong profitability. MGM Resorts’ scale, brands and expertise will allow the combined businesses to expand within existing gaming segments and provide incremental opportunities to enter new areas.”
The acceptance period of the offer is expected to commence on or around June 2022 and expire on or around August 2022. An offer document regarding the offer is expected to be made public shortly before the commencement of the acceptance period. Assuming that the offer is declared unconditional no later than around end of August, settlement is expected to begin around early September 2022.
The offer is subject to certain regulatory approvals, the receipt of valid tenders of more than 90 percent of LeoVegas’ shares and customary closing conditions. It is expected to be completed during the second half of fiscal year 2022.
LeoVegas’ revenue grew by 1.9 percent year-on-year to €98.5 million in Q1 of 2022, as the operator’s board outlined its reasons to support the acquisition offer from MGM Resorts. The operator noted that, in local currency terms, revenue was level year-on-year, however.
The operator’s decision to withdraw from the Dutch market when it opened on October 1 continued to have a major impact on revenue. With the Netherlands excluded, revenue would have been up 9 percent year-on-year.
Elsewhere, LeoVegas noted that the business was especially successful in Sweden, where a SEK5,000 deposit cap for online casino was repealed during the quarter.
“Sweden had another good quarter and generated a new record level of revenues for the period,” LeoVegas said, according to iGaming Business. “During the quarter, the company was once again the largest commercial operator in the Swedish market and continued to capture market shares.”
