Rumors has finally turned into reality as LeoVegas has officially come to an agreement with Malta based company Royal Panda for the total acquisition of its shares for a total purchase price of €60m with the possibility of an additional €60m in earn-out payment.
The take over of Royal Panda will eventually strengthen LeoVegas' presence in various regulated markets, most of all the UK. This will also add that extra excitement to LeoVegas brand.
The agreement also states that if certain milestones are achieved within 12 months of the acquisition, Royal Panda will be entitled to an additional maximum earn-out payment of €60m. Having sad that, the total acquisition cost will amount to €120m.
For Royal Panda to get the maximum earn-out payment, the company must, at least, make €50m in Net Gaming Revenue (NGR) ,at least €15m in EBITDA. At least €34m of NGR must be derived from the UK, and EBITDA from the UK must amount to at least €5m.
LeoVegas cash position is very strong of which has been used for the initial purchase price. In addition, LeoVegas has obtained a debt financing of €100m for them to act on future acquisition opportunities. From the €100m, €40m consists of a Revolving Credit Facility (RCF). The financing has a term of three years, and the amortisation will commence in the second quarter of 2019 amounting to €10m quarterly. The interest rate on financing is approximately 2 percent.
