LeoVegas, has, through its wholly owned subsidiary LeoVegas International Ltd, entered into an agreement to acquire all of the shares in the Maltese company Web Investments Limited, whose group holds the Royal Panda trademark (“Royal Panda”).

The acquisition is being made for a purchase price of EUR 60 m with a possible earn-out payment of an additional EUR 60 m. Due to the acquisition and in order to act on future acquisition opportunities, the LeoVegas Group has obtained debt financing of EUR 100 million, of which EUR 40 million constitutes a revolving credit facility. Completion of the acquisition is expected to be transferred on 1^st of December 2017. Due to the acquisition, LeoVegas Board of Directors has adjusted the Company’s financial targets.

The acquisition of Royal Panda strengthens LeoVegas’ expansion in regulated gaming markets, especially in the UK, and adds a strong and exciting brand to the LeoVegas Group. If certain financial milestones are met within 12 months after the date of completion, Royal Panda is entitled to a maximum earn-out payment of EUR 60 m. The total purchase consideration can thus amount to a maximum of EUR 120 m.

In order for Royal Panda to be entitled to the maximum earn-out, the company must achieve at least EUR 50 m in Net Gaming Revenue (NGR) and EBITDA of at least EUR 15 m, at least EUR 34 m of NGR must be derived from the UK, and EBITDA from the UK must amount to at least EUR 5 m. The acquisition of Royal Panda is in line with LeoVegas strategy to continue growing on regulated markets.

LeoVegas has a strong cash position that has been used for the initial purchase price. In addition, LeoVegas has obtained a debt financing of EUR 100 m in order to act on future acquisition opportunities. Out of the EUR 100 m, EUR 40 m consists of a Revolving Credit Facility (RCF). The financing has a term of three years, and amortisation will commence in the second quarter of 2019 in the amount of EUR 10 m quarterly. The interest rate on financing is approximately 2 percent.