The casino industry is gearing up for ambitious growth over the next 12 months and the sector is seeing some interesting sales and acquisitions taking place as it heads towards the end of 2017. One of the most prominent recent deals has been the announcement that LeoVegas has acquired Royal Panda for €100 Million.
The budding casino holds a reputation and popularity among the top online casino sites that has been growing steadily. The deal has several conditions attached to it, which look sure to mean big things can be expected from both of these budding online gaming companies, LeoVegas and Royal Panda, in 2018!
As one of Scandinavia's leading online casino companies, LeoVegas already has significant market penetration when it comes to mobile gaming, casino gaming and international sports betting. However, news of its deal to acquire Royal Panda highlights how it’s keen to have more than one brand playing for it in the industry.
The deal will see LeoVegas purchase the Royal Panda brand from Web Investments Limited. In phase one of the deal, €60 million will be paid for the brand, with a second payment of €60 million should the company generate a Net Gaming Revenue (NGR) of at least €50 million.
Also, the company must generate earnings before interest, taxes, depreciation and amortization (EBITDA) of €15 million or more inside a year. In a press release announcing the deal, LeoVegas Group's CEO Gustaf Hagman commented on the strategic buyout of the brand, revealing that:
"Royal Panda has in a short time built up an efficient business with an exciting and strong brand. This is a major acquisition that we are carrying out following a carefully executed process."
The success of Royal Panda's budding casino and sportsbook has significant reliance upon a strong UK customer base. During the 3Q, 50% of the company's revenue was generated from British gamblers. This contributed to impressive revenue totals that increased by 61% to €9.8 million, with an EBITDA of approximately €3.2m.
As a result of Royal Panda's key UK consumer base, the deal also includes clauses by which the brand must generate in excess of €34 million in NGR from the UK, and EBITDA from the UK must amount to at least €5 million. LeoVegas Casino has therefore reaffirmed its intention to focus on the UK during the next year, with scope to increase revenue from the site's relatively new sports betting product.
The betting site is clearly still currently secondary to the casino as a means of income. Hagman revealed that the LeoVegas Group views the acquisition as one that perfectly complements the LeoVegas Casino brand, and will aid its goal of growing into a global brand, with a stronger UK base. He said:
"With the help of the strong symbolic value in the panda, the company has built a premium brand among gamers, and we will complement LeoVegas with Royal Panda. This gives us two great brands with global appeal, which makes the scalability in the continued growth strong while strengthening our position in the UK."
The online gambling industry is projected to have a strong 2018 – something the LeoVegas Casino and Royal Panda brands are clearly aiming to take advantage of. If you're interested in what made Royal Panda such a quality acquisition, simply head over to Royal Panda today and enjoy their topnotch gaming products!