LeoVegas Buys Majority GameGrounds StakeHarry Coulter | 05 Jan 2018
Mobile gaming giant LeoVegas has signed an agreement to acquire 51% of the shares in GameGrounds United AB (CasinoGrounds). Through its wholly owned subsidiary, LeoVentures Ltd, the LeoVegas group purchased the majority share in CasinoGrounds, the company which owns the streaming network casinogrounds.com. According to the terms of the agreement, the purchase price was SEK 30 Million with a potential earn-out payment of SEK 15 Million. As of 2018, CasinoGrounds is the leading live streaming site for online casino games via Twitch and YouTube.
A Unique Opportunity
GameGrounds United AB operates casinogrounds dot com, which has become a popular casino streaming platform with an active social forum. CasinoGrounds acts as a link between casino operators and game makers in the online casino industry and is rapidly growing in popularity. In the third quarter of 2017, the company showed a revenue of SEK 4.1 million with excellent profitability. The acquisition for the LeoVegas group will serve to boost their online presence while not affecting their net profit in any significant way.
Speaking to the press, LeoVegas’ Group CEO, Gustaf Hagman said that the company sees CasinoGrounds as a catalyst for a new type of behaviour for casino enthusiasts. CasinoGrounds has created a niche where persons interested in casino activities are watching others play games via Twitch and YouTube while getting involved in its social platform. According to Hagman, the combination of moving picture format and proprietary content creates exciting opportunities for the company going forward. It is directly in line with their strategy to be an innovative company that is entrepreneur driven.
Looking to the Future
Hagman went on to explain that LeoVegas has had a successful relationship with CasinoGrounds since 2016 and are familiar with their team. Their goal is to scale up the existing operations at CasinoGrounds to even more markets. The potential maximum earn-out payment that LeoVegas stands to gain will be based on the revenue performance between January and June 2018. An initial assessment done by LeoVegas revealed that the full earn-out payment would be made. The agreement also includes an option for LeoVegas to purchase an additional 29 per cent of the CasinoGrounds shares in 2021/2022 at five times the operation profit.
This is the second major deal for the LeoVegas group in the last few months. In November 2017, LeoVegas acquired fellow operator Web Investments Limited, the company behind the hugely successful Royal Panda gaming brand. The acquisition of Web Investments Limited will give LeoVegas extended leverage in the online market and boost their global reach.