LeoVegas buys IPS for GBP 65 million
News on 13 Jan 2018
News on 13 Jan 2018
Stockholm-based online gambling group Leo Vegas has celebrated its sixth anniversary by entering into an agreement to acquire rapidly growing UK casino operator Intellectual Property & Software Limited (“IPS”) for GBP 65 million.
The deal includes other related assets from two further companies, including top brands such as 21.co.uk, Slotboss, Bet UK and UK Casino.
During the fourth quarter of 2017, IPS generated revenues of GBP 11.7 million and, together with the companies whose assets are also being acquired as part of the transaction, an adjusted EBITDA of GBP 3.8 million, representing an EBITDA margin of 32.6 percent.
Revenue for the fourth quarter of 2017 grew by 49 percent compared with the fourth quarter of 2016. Of IPS’s total revenue, 96 percent comes from the UK and 73 percent via mobile devices. The transaction is scheduled to close late in the first quarter of 2018.
In last year’s acquisition of Royal Panda, LeoVegas secured debt financing of Euro 100 million, with Euro 40 million of this in a Revolving Credit Facility. The facility has a term of three years, and amortisation will begin during the second quarter of 2019 at Euro 10 million per quarter. Interest on the facility is approximately 2 percent.
This loan is now partly being used for the IPS acquisition.
Gustaf Hagman, LeoVegas’ Group CEO, said Friday:
“Since its start LeoVegas has pursued a highly successful global brand strategy. Following the acquisition of Royal Panda, LeoVegas now works with two scalable brands. We believe that in larger markets our global brands, LeoVegas and Royal Panda, can be complemented with a local, multibrand strategy. The UK market is a very large and mature market and that is the reason to work with several brands that attract various types of customers.
“In IPS we see several attractive attributes, and they have tremendous momentum in their growth and profitability. Combined with one of the market’s most effective customer acquisition models, we are now gaining a firm stronghold in the UK with the acquisition of 85 employees with local expertise. With this acquisition, we are adding a company culture with a strong technology and product focus which is a perfect fit with LeoVegas’ to further strengthen the group’s position as a leading GameTech company.”
IPS currently uses a technical platform from Bede Gaming, and in connection with the acquisition LeoVegas has entered into a services agreement with Bede Gaming.
