LeoVegas eyes £44m bond issue to aid acquisition plans

LeoVegas has unveiled plans to achieve “long-term and stable financing” through a series of bond agreements and bank loans as the firm looks into M&A. The operator confirmed the engagement of Swedish financial institutions SEB and Swedbank as joint bookrunners as it explores a senior unsecured bond worth an estimated SEK500m (£44m). However, it is understood funds available under this facility could rise to SEK1,200m (£105m) over the next three years. A capital markets transaction, which could involve a share rights issue, is also under consideration. “The proceeds from the potential bond issue will be used to facilitate LeoVegas’ expansion strategy, refinance existing debt and for potential acquisitions,” LeoVegas said. In addition, the firm has agreed to enter into an additional three-year revolving credit facility agreement worth €40m (£35.4m). “With this, we ensure long-term and stable financing for LeoVegas,” CEO Gustaf Hagman said. “We strengthen the company’s financial flexibility and diversify our financing with the combination of a bond and new bank loans. “This enables us to continue to deliver on our expansion strategy where we focus on regulated markets and markets soon to become regulated. “Further, we continuously evaluate strategic and complementary acquisitions that may fit into the LeoVegas Group,” Hagman added. As part of the financial realignment, LeoVegas has introduced a new leverage target to its set of long-term financial goals, under which the business leverage ratio (net debt to adjusted EBITDA) shall not, over the long term, exceed 1.0x. However, it is understood LeoVegas can under certain circumstances exceed this level during short-time periods in connection with pursuing larger acquisitions or other strategic initiatives. LeoVegas targets also include long-term organic growth, a long-term EBITDA margin of at least 15% and to pay a dividend of at least 50% of the firm’s profits after tax to shareholders.