Aristocrat Agrees Terms for £2.7bn Acquisition of Playtech

The Australian slot machine manufacturer Aristocrat has agreed on terms to acquire Playtech in a deal worth approximately £2.7bn (€3.2bn/$3.7bn).

According to Aristocrat, the acquisition will provide the business with “material scale” in the online gambling and online sports betting segments.

Aristocrat to acquire Playtech

According to the announcement, Bidco, a wholly-owned subsidiary of Aristocrat, will acquire the entire issued and to be issued ordinary share capital of Playtech.

Aristocrat will pay 680 pence for each Playtech share in an all-cash deal that represents a premium of 58.4% on the 429.2 pence per share closing price of Playtech shares on Friday 15 October. This was the last day of trading before the deal was announced.

Aristocrat also said this represents a premium of 66% to the volume-weighted average closing price per Playtech share of 409.7 pence over the three-month period ending 15 October.

Aristocrat plans to fund the purchase through a combination of existing cash resources available to the group, new debt facilities, and an equity offering of Aristocrat’s ordinary shares.

According to Aristocrat, the purchase of Playtech will provide the business with scale in both the online casino and online sports betting markets, delivering medium-term revenue and earnings growth, particularly in North America’s real-money online gambling space.

The combined operation will employ staff across 24 countries and territories, as well as seven content studios across the globe. The business will also operate in 30 regulated jurisdictions with 170 licensees globally.

Aristocrat added that the deal would allow its and Playtech’s distribution, technology, and content would reach a broader range of customer player needs. Playtech’s Snaitech operation will also give the combined operation a presence in multiple European markets.

The purchase is subject to several regulatory approvals and closing conditions as well as approval from a minimum of 75% of Playtech shareholders. Furthermore, Playtech’s board is expected to recommend the deal be approved.

The deal is expected to close in the second quarter of 2022.

Comments from executives

Aristocrat chief executive Trevor Croker said the deal would combine the company’s “world-class” gaming content, customer, and regulatory relationships with Playtech’s online gaming platform and European B2C footprint.

Croker added: “Additionally, the business will be ideally positioned to unlock sustainable shareholder value by seizing opportunities in the fast-growing global online RMG segment as they continue to open up, particularly in North America.

“Adding Playtech’s talented team with Aristocrat’s established strengths and momentum will create a true industry leader in the global online RMG space, particularly in terms of our B2B capabilities

Mor Weizer, CEO of Playtech, added: “This transaction marks an exciting opportunity in the next stage of growth for Playtech, and delivers significant benefits to our stakeholders, including our customers, our shareholders and our incredibly talented people. This deal has the potential to enhance our distribution, our capacity to build new and deeper relationships with partners, and bolsters our technological capabilities. 

“The combination of our two companies builds one of the largest B2B gaming platforms in the world, with the people, infrastructure and expertise to provide our customers with a truly best-in-class offer across all areas of gaming and sports betting.”

Commenting on the Acquisition, Brian Mattingley, Chairman of Playtech, said: “In recent years, Playtech has successfully repositioned its world leading gambling technology and operations, expanding in strategically important regulated markets and driving major online B2B revenue growth. 

“Whilst the business has made significant progress, most notably in the Americas, Aristocrat’s proposal provides an attractive opportunity for shareholders to accelerate Playtech’s longer-term value.”

Recent developments

The proposed acquisition comes after Playtech agreed to sell the supplier’s financial trading division, Finalto, last month.

Playtech is set to sell Finalto to Gopher Investments for $250m after shareholders rejected a board-approved bid led by the Barinboim Group. This comes after Playtech put Finalto up for sale in March so that the business could focus on its core gambling business.

Back in August, Aristocrat also announced plans to expand its digital games business after it agreed on plans to acquire mobile game studios Playsoft and Futureplay.