Live dealer gaming specialist Evolution Gaming has acquired the company that owns the building which accommodates the majority of its live casino operational activities in Riga, Latvia, for a total purchase price of €12.4m.
Providing both strategic and financial benefits, the supplier said that the acquisition would allow for efficient future expansion of studio floor space in the building.
Evolution has been a tenant in the building, located just outside central Riga, since 2011 and currently rents more than half of the total office space.
As the landlord has not been able to provide guarantees for further expansion, Evolution has conducted a review of different alternatives, with the acquisition of the building considered to be the best option both strategically and financially.
“The acquisition provides clear strategic advantages, as we strengthen the control over our future and significantly easier will be able to expand the studio floor space to meet the big demand for more tables and dedicated environments,” said Jens von Bahr, CEO of Evolution Gaming. “Compared to if we had continued as tenants, we also get a slight positive financial impact.”
The purchase price amounts to €12.4m and is not expected to affect the company’s objective to distribute at least 50 per cent of the net profit for the year.
The purchase is being conducted through an acquisition of the company that owns the property and is expected to be completed in January 2016.
The payment will comprise cash of €3.1m and loans of €9.3m, with the purchase price less than the external valuation of the building. Interest costs and amortisation will be lower than the expected rental costs over the coming years.
Shares in Evolution Gaming Group AB (Co. Data) (OMX:EVO) were trading at SEK241.50 per share in Stockholm this morning following the announcement.