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MGM Resorts has made an Offer for LeoVegas for $607 Million

2103 views May 2, 2022

MGM Resorts has made an Offer for LeoVegas for $607 Million

MGM Resorts International has offered $607 million to buy LeoVegas AB. Aiming to expand the casino giant’s already considerable online gambling presence. For the Swedish gambling firm, the biggest operator on the Las Vegas Strip is paying $6.20 per share. MGM plans to pay for the transaction with cash and expects it to boost profits per share (EPS).

MGM may gain not just a well-known brand in the European online gambling market. But also a successful one — a rarity in the US iGaming business – in LeoVegas. Based on current exchange rates, LeoVegas earned $414.24 million in revenue. And $50.59 million in profits before interest, taxes, depreciation, and amortization for the fiscal year ended March 2022.

MGM Resorts CEO Bill Hornbuckle stated:

“We think that this offer presents a compelling opportunity for the combined teams of MGM Resorts. And LeoVegas to accelerate our global digital gaming development and fully realize the promise of our omnichannel strategy”

The offer comes ahead of Bellagio’s first-quarter earnings report, which will be released today after US markets close. Analysts estimate the business to lose five cents per share on $2.79 billion in sales.

Increasing Exposure to Europe

MGM has a commanding position in the US iGaming and sports wagering markets. And a rising presence in Ontario, Canada. Via its BetMGM business, which is a 50/50 collaboration with Entain. LeoVegas also has a presence in Canada’s most populous province.

If the merger with LeoVegas completes, the firm would have an advantageous position. In Europe, where the target has eight gaming licenses in the Nordic area and also throughout the continent. In Europe, LeoVegas is also a well-known sportsbook operator. Implying that a takeover by MGM would complement the suitor’s BetMGM operation.

According to the release, “LeoVegas’ online casino and sports betting capabilities and its strong customer base outside of the United States are anticipated to enhance MGM Resorts’ footprint across the globe substantially.”

MGM Resorts

The LeoVegas promotion sets to begin next month and last through August

“Assuming the unconditional offer is made no later than the end of August 2022”. The announcement states, “settlement is likely to commence in early September 2022.”

MGM Expects Deal

MGM expects to complete the deal in the second part of this year. LeoVegas, founded in 2011 by Gustaf Hagman and Robin Ramm-Ericson, has been profitable since 2014. And its revenue compounded annual growth rate from 2017 to 2021 was a remarkable 16 percent. MGM had $4.8 billion in cash and a $1.67 billion undrawn credit revolver last year. Providing it with one of the industry’s best balance sheets also the capacity to undertake accretive acquisitions.

The $17.2 billion sales of MGM Development Projects to VICI Properties. Which generates a profit for MGM and a 1% share in the new firm. However, it has added to the corporation’s solid financial position. Click here

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