LeoVegas makes sports betting push with €5m Expekt acquisition
Gustaf Hagman vows to “restore Expekt to its former glory” as LeoVegas onboards three-person operations team
LeoVegas has bolstered its sports betting portfolio with the €5m (£4.2m) acquisition of Swedish-licensed operator Expekt Nordics Ltd, which operates the legacy Expekt sports betting brand.
The €5m will be paid entirely in cash and financed from existing LeoVegas funds, with the purchase price based on a net gaming revenue (NGR) multiple of 0.7x for 2020.
Under the terms of the deal, LeoVegas will acquire all shares and assets in the business from French operator Betclic, which has owned the brand since it acquired Malta-based Mangas Gaming.
The deal includes all rights to the Expekt brand, as well as access to the customer database.
A three-person operations team will join LeoVegas as a result.
LeoVegas has confirmed the Expekt brand will be migrated onto the firm’s proprietary technology platform as soon as May, when the acquisition will formally complete.
Launched in 1999, Expekt was a successful sports betting brand in the Nordics, particularly in Sweden, and was acquired by Mangas in 2009 for €125m. In the years since, Expekt’s share of the Swedish market has declined significantly, although its brand awareness remains strong.
Expekt generated NGR of just €6.9m in 2020, 91% of which is directly attributable to the Swedish market.
Leovegas buying Expekt for a steal 5 MEUR. Once the shining jewel of the Nordics. What did Mangas Gaming pay, like 20x that?
— Mikael Pawlo (@mpawlo) March 15, 2021
Reflecting on the acquisition, LeoVegas CEO Gustaf Hagman said: “For those of us who grew up with online gambling in Sweden, Expekt is undeniably one of the pioneers in sports betting. I can remember back in the early 2000s when everyone played on Expekt.
“After a few years on the sidelines, we will now restore Expekt to its former glory as the leading sports betting brand.
“This is a milestone for LeoVegas and represents a broadening of our strategy. We look forward to Expekt once again becoming a leading sport brand in Sweden and the Nordic countries,” Hagman added.
Sports betting accounted for just 9% of LeoVegas revenue in Q4 2020, a figure which the firm has pledged to scale up over the next two years, beginning with the Expekt acquisition.
“We are working resolutely to offer the ultimate mobile sports betting experience, which will entail a number of new innovations and new thinking with a starting point from what a mobile experience can entail for the big years of sport in 2021 and 2022,” Hagman explained.
2021 is shaping up to be a pivotal year for sports betting operators with many tournaments and events to go ahead, including the UEFA Champions League, Copa America and French Open, as well as the delayed Olympics and Euros.
Next year will play host to the Winter Olympics in Beijing, the UEFA European Women’s Championship and the FIFA Men’s World Cup in Qatar, all of which will increase sports betting participation.
When I moved to Malta to work in the Igaming sector in 2008 there were really only 3 companies to speak of and we had parties together, it was Unibet, Betsson and Expekt who had somewhat similar valuations. Today Unibet 30B SEK, Betsson 10B, Expekt 50milj SEK
— HenrikInvest (@henrikinvest) March 15, 2021
Assessing the acquisition, Regulus Partners analyst Paul Leyland said: “The acquisition of Expekt Nordics is clearly attractive in terms of valuation and adds a more betting-led brand to LeoVegas’ portfolio of 13 largely gaming-led brands.
“However, it does not move the dial in terms of LeoVegas’ organic capability, nor does it materially extend customer reach.
“We believe that breaking into the betting-led market rather than tweaking cross-sell will require considerably more organic investment and/or a much bolder acquisition,” he added.