GVC opens door to further M&A with new financing deal

GVC Holdings has struck a new financing agreement, enabling the firm to gain access to additional funding should it wish to make further acquisitions.

The syndicated facility, the first of its kind to be secured by the firm, is made up of €250m six-year loan, which will be used to pay-off the Nomura loan taken last year, and a €70m revolving credit facility.

GVC said the syndicated loan was “significantly oversubscribed”, with the likes of Normura, Bank of Ireland and Deutsche Bank all taking major roles.

In addition, GVC will benefit from an accordion facility, which will allow the firm to secure additional financing up to 2.25x Group EBITDA – a facility GVC chief executive Kenny Alexander described as “important” during a time of industry consolidation.

In H1 2016 the firm posted clean EBITDA of €104m, meaning on a full-year basis the firm would be able to take additional funding approaching €500m.

“The long-term refinancing provides greater visibility and security in terms of our debt facilities,” Alexander said.

“To have completed our inaugural institutional loan market financing and to have been significantly oversubscribed is a reflection of the progress made by GVC.

“Furthermore, access to a broader debt investor base is important given the ongoing consolidation in the gaming industry, particularly given the Group’s proven track record of successful M&A,” he added.

Cenkos Securities analyst Simon French said the new financing deal was notable when taking into account GVC’s leading role in industry consolidation.

“We view this as a significant development,” French said “and further reinforces the company’s credentials as a major player with a proven M&A track record in the global online gaming market which is undergoing rapid consolidation.”

GVC’s share price remained relatively unchanged at 698.50p after early morning trading.