MGM Resorts International has made a bid to acquire the Swedish Casino and Sportsbook operator, LeoVegas AB for $607 million with a view to completing the deal in the second half of 2022.
The acquisition, if successful, will give MGM access to key European markets. LeoVegas AB is listed on the Stockholm stock exchange and is licensed in the eight jurisdictions with a strong profile in the Nordic regions and the UK. The company has also recently been granted a license to operate Ontario, Canada and is active in Latin America.
MGM Resorts’ CEO & President Bill Hornbuckle said: “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.
“We have achieved remarkable success with BetMGM in the U.S., and with the acquisition of LeoVegas in Europe we will expand our online gaming presence globally. We believe that 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.”
The acceptance period for the offer runs from June 2022 to August 2022 with the deal expected to be completed by the end of the year.
The offer has been recommended to the shareholders of LeoVegas by the company’s board including founder, Gustaf Hagman.
LeoVegas was founded in 2011 and has been profitable since 2014. In their last reports to 31st March 2022 they posted revenues of $414.24 million EBITDA. Between 2017 and 2021 its annual growth rate has been 16%.
The operational and financial profile of the business makes it suitable target for BetMGM but there has been speculation that the acquisition has other motivations behind it.
Regulus Partners business analysts believe that this could be the start of a play for BetMGM to bring an end to the Joint Venture it currently has with Entain.
Regulus commented: “The narrative is of a complementary non-US strategy, but by owning LeoVegas, MGM will clearly compete with Entain everywhere but the US. The three will also be going head-to-head in Canada.
“While from an operational perspective, that is valid enough, it is likely to ratchet up strategic tensions. MGM seems set to own its own digital capability on a global basis one way or another, meaning the LeoVegas bid looks like a much more strategic play than an operational bolt-on.”
The acquisition of LeoVegas will give BetMGM access to an alternative sportsbook platform to that provided by Entain.
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