MGM Resorts Offering $607 Million for LeoVegas
MGM Resorts International (NYSE:MGM) is offering $607 million to gain LeoVegas group AB — a relocation aimed at increasing the cassino giant’s already sizable online gaming footprint.
The largest manipulator on the Las Vegas Strip is offering $6.20 a apportion for the Swedish gaming company. MGM is paying for the purchase with existing hard cash on deal and expects the acquisition to supply to earnings per part (EPS).
In LeoVegas, MGM could add together not only when a intimate nominate on the European online gaming scene, but a profitable one as intimately – a infrequency inward the US iGaming industry. For the yr conclusion March 31, 2022 LeoVegas generated revenue of $414.24 one thousand thousand and earnings before interest, taxes, wear and tear and amortisation (EBITDA) of $50.59 million, based on current change rates.
We trust that this extend creates a compelling chance that allows the combined teams of MGM Resorts and LeoVegas to speed our planetary digital gaming maturation and to the full substantiate the potential of our omnichannel strategy,” said MGM CEO Bill Hornbuckle inwards a statement.
The tender comes onward of the Bellagio operator’s first-quarter earnings report, which is scheduled for today after the secretive of US markets. Analysts expect the troupe testament report a deprivation of quintuplet cents a portion on revenue of $2.79 billion.
Adding European Exposure
Through its BetMGM unit – a 50/50 partnership with Entain Plc (OTC:GMVHY) – MGM has dominant positioning inward the US iGaming and sports wagering scenes and a growing front inward Ontario, Canada. LeoVegas also operates inward Canada’s largest province.
Should the keep company come together the trade with LeoVegas, it would gain ground enviable positioning inward Europe where the butt has eighter from Decatur gaming licenses inwards the Nordic region and crossways the continent. LeoVegas is also a well-known sportsbook manipulator inwards Europe, indicating a purchase by MGM could fit inwards wellspring with the suitor’s BetMGM business.
“LeoVegas’ online gambling casino and sports betting capabilities and warm customer alkali outdoors of the U.S. is expected to farther expand MGM Resorts’ front around the world,” according to the statement.
Founded in 2011 by Gustaf Hagman and Robin Ramm-Ericson, LeoVegas has been profitable since 2014 and from 2017 to 2021, its sales compounded yearly growth grade was an telling 16%.
For MGM, It Pays to Have Cash
At the cease of lowest year, MGM had $4.8 billion in hard cash and a $1.67 billion undrawn course credit revolver, gift it unity of the strongest equipoise sheets inwards the gaming manufacture and the resources with which to make accretive acquisitions.
That strong immediate payment office is increasing with the recent closing of the $17.2 1000000000000 sale of MGM Growth Properties (NYSE:MGP) to VICI Properties (NYSE:VICI), which is generating a windfall for MGM as considerably as a 1% bet in the new company.
As for the LeoVegas offer, it’s slated to commence next month and expire inward August.
“Assuming that the offer up is stated unconditional no more later than around oddment of Aug 2022, settlement is expected to lead off around ahead of time September 2022,” according to the release.
Should everything go away according to plan, MGM believes it tin fill up the dealing inward the arcsecond half of this year.