MGM Resorts International on Monday revealed it has commenced a recommended public tender offer for 100% of the shares of Sweden-based mobile gaming company LeoVegas.
The parties said the offer has been made at a price of SEK 61.00 in cash per share, equivalent to a total tender value of approximately $607m.
MGM Resorts said the acquisition will be financed with existing cash and is expected to be accretive to its earnings and cash flow per share.
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 2022, settlement is expected to begin around early September 2022, the two companies explained.
The offer is subject to certain regulatory approvals, the receipt of valid tenders of more than 90% of LeoVegas’ shares and customary closing conditions. It is expected to be completed during the second half of fiscal year 2022.
Founded in 2011 by Gustaf Hagman and Robin Ramm-Ericson, LeoVegas has licenses in eight jurisdictions, primarily in the Nordics and rest of Europe.
Officials said LeoVegas generated €393m (US$413.8m) in revenue and €48m in adjusted EBITDA during the last 12 months ending March 31, 2022. The business is headquartered in Stockholm, with offices in Malta, United Kingdom and Milan.
MGM Resorts said in a statement it believes the acquisition of LeoVegas will provide a “unique opportunity” for the company to create a scaled global online gaming business with strategic opportunities to accelerate growth and product offerings, an experienced online gaming management team and robust technology capabilities, and a commitment to continued profitable growth.
Officials said LeoVegas has “operated profitably as a high-growth platform” since 2014. From 2017 to 2021, LeoVegas’ revenue reportedly had a compounded annual growth rate of 16%, while maintaining strong profitability.
Bill Hornbuckle, president and CEO of MGM Resorts, said his company’s scale, brands and expertise will allow the combined businesses to expand within existing gaming segments and provide incremental opportunities to enter new areas.
“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,” Hornbuckle said in a statement. “We have achieved remarkable success with BetMGM in the US, and with the acquisition of LeoVegas in Europe we will expand our online gaming presence globally.”
Hornbuckle added the management team believes 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.”
