Evolution Gaming to Buy Riga-Based Studio Building
Evolution Gaming announced today that it is to buy the company which owns the building where the gaming developer and supplier’s Riga-based operational activities are taking place. Evolution Gaming is to pay the amount of €12.4 million for its latest acquisition.
The company noted that the purchase will not affect its goal to distribute no less than 50% of its full-year net profit. Evolution Gaming also pointed out that the new acquisition is in line with its strategy to efficiently expand its studio floor space in Riga.
The building has been accommodating the provider of Live Casino and other gaming products since 2011. Evolution Gaming is currently renting more than a half of the overall office space. With the constant expansion of its operations, the company realized that it would need more space to provide its gaming services. And since the landlord was not able to guarantee the much-needed space expansion, Evolution Gaming considered the purchase of the whole building the best possible option both financially and strategically.
Evolution Gaming CEO Jens von Bahr said that the latest acquisition will provide the company with certain strategic advantages. Through the expansion of its studio floor, the international provider of Live Casino services will be able to meet the constantly growing demand for gaming tables as well as dedicated casino environments. The executive also pointed to the slight financial benefit the purchase of the whole building would result in.
Evolution Gaming revealed that the acquisition is to be conducted through the purchase of the company that currently owns the building. The transaction is likely to be completed sometime in January 2016. Evolution Gaming is to pay €9.3 million in loans and €3.1 million in cash, with the whole purchase prize being lower than the building’s external valuation. What is more, costs related to interest and amortization are expected to be lower than the rental costs in the years to come.
Evolution Gaming reported revenue increase of 57% to €19.5 million for the third quarter ended September 30, 2015. The company noted that revenue from mobile operations accounted for 28% of overall turnover. Profit for the period totaled €5.8 million. Adjusted EBITDA grew 60% during the reported three months to reach €7.8 million.