The LeoVegas Group Expands its UK Presence




A Look at the LeoVegas Group's Latest Acquisition
When presenting its third quarter trading update at the end of September, the group announced that it has entered into a 'definitive agreement' to acquire the Malta-based operator Royal Panda (RoyalPanda.com). This represents a significant development for the brand, both in terms of the size of the investment and the access that it affords to an international market of customers.

The Q3 trading update recorded the value of the deal at around 60 million Euros (£52.9 million), which is the single largest acquisition ever made by the brand. A further 60 million Euros could also be added in earn-out incentives, and this not only underlines the size of the deal but also its strategic importance in the marketplace.

 
What will this Mean for the Brand and the Marketplace?

Make no mistake; this deal holds huge strategic significance for the LeoVegas group. To begin with, it guarantees the operator access to an established and multi-market brand, which already boasts a large consumer base throughout Europe.

Not only this, but it also extends the brand's presence in a saturated but extremely profitable UK market, by targeting one of the nation's most popular operators and online platforms. This is important, as the competitive nature of the UK market makes it extremely difficult for new operators to claim a viable market share, but LeoVegas have negated this issue by acquiring and established household name. In doing so, the group have also aligned themselves with an exciting brand, and one that has the potential for further growth in the future.

This deal has been perfectly timed, with online gambling enjoying significant growth and currently accounting for 33% of the overall industry. Between April 2015 and March 2016, online casino operators in the UK yielded an impressive £4.5 billion, and this is set to go further for the foreseeable future. LeoVegas have now put themselves in the ideal place to capitalise on this, by combining two powerful and purposeful brands with a targeted UK user base.

This deal should be completed by December, with the group having facilitated the purchase by obtaining a debt financing agreement of 100 million Euros. This follows a quarter in which the brand generated operating profits of 55 million Euros, showcasing gains across its entire portfolio.

The investment is certainly worthwhile, as it will quickly establish LeoVegas as a key player in the UK market and provide them with the opportunity to establish a true superpower of a brand. From an industry perspective, we will see increased competition in an already crowded market, so brands will need to compete even harder to maintain their own share.
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