LeoVegas pens £65m deal to acquire UK-facing casino firm

LeoVegas has signed a deal to acquire Alderney-based casino operator Intellectual Property & Software Limited (IPS) and its brands, in a move intended to strengthen LeoVegas’ position in the UK market.

The £65m deal, made via the operator’s subsidiary LeoVegas Gaming Ltd, will be financed by cash and from existing debit facilities.

As part of the deal, LeoVegas will also acquire several brands including 21.co.uk, Slotboss, Bet UK and UK Casino.

Group CEO Gustaf Hagman said: “We believe that in larger markets our global brands, LeoVegas and Royal Panda, can be complemented with a local, multi-brand strategy.

“The UK market is a very large and mature market and that is the reason to work with several brands that attract various types of customers.

“In IPS we see several attractive attributes, and they have tremendous momentum in their growth and profitability.”

In Q4 2017 IPS revenues grew 49% to £11.7m, with an adjusted EBITDA of £3.8m, and a margin of 32.6%.

Hagman said IPS would continue to run on Bede’s casino platform, which has powered the operator’s focus on digital and data-driven customer acquisition.

Speaking to EGR, Bede chairman Joe Saumarez Smith said the IPS sale would help fund the growth of Bede, as both firms share a number of major shareholders.

“LeoVegas fairly quickly became the obvious choice with the overall health and growth of the business. LeoVegas and IPS are culturally very similar organisations,” Saumarez Smith added.

In an analyst note, Regulus Partners said the acquisition would see LeoVegas’ run-rate UK revenue exposure rise to £100m with the operator likely to pass 888 in B2C revenues in 2018.

The note also said the deal, which is likely to close in March, would enable the firm to leverage a new multi-brand strategy in larger, more mature markets.

LeoVegas acquired UK-facing casino brand Royal Panda in October as part of its plan to grow in the UK and to boost its multi-brand strategy.