Acquisition expands company's presence in the fast-growing digital market

Aristocrat buys social gaming firm Plarium

Plarium is a privately owned free-to-play mobile, social and web-based game developer.

Israel 
| 11/08/2017

Aristocrat will acquire 100% of Plarium Global Limited for total consideration of an upfront amount of US$500m cash, subject to customary completion adjustments; and an earn-out arrangement payable to Plarium shareholders following the end of calendar years 2017 and 2018 respectively.

Highlights

  • Significantly expands Aristocrat’s Digital addressable market into adjacent gaming segments
  • Increases Aristocrat’s overall exposure to the fast growing Digital market with pro forma Aristocrat
  • Digital revenue contribution increasing from 14% to 22% for the year ended 31 March 20171
  • Plarium has proven content, ability to monetise social games and global game development talent across multiple studios
  • Plarium’s management team, who have a proven track record of successfully growing the business, have agreed to retention and deferred consideration arrangements
  • Attractive financial metrics, strong historical growth and expected to be EPSA accretive in year one2
  • Strong cultural alignment with Aristocrat

The total transaction consideration implies a multiple of 10x LTM EBITDA at year end.

Plarium is a privately owned free-to-play mobile, social and web-based game developer. Plarium is headquartered in Herzliya, Israel and has over 1,200 employees across five genre-specific studios as well as multiple offices throughout Europe, Israel and the US.

The transaction is expected to complete by the end of December 2017, subject to the receipt of necessary regulatory approvals and satisfaction of other customary closing conditions. Under the sale and purchase agreement, Plarium and its shareholders have made representations, warranties and covenants customary for a transaction of this type.

Aristocrat CEO and Managing Director Trevor Croker said, “Aristocrat has continued to deliver significant growth and outstanding results in our Digital social casino business. The acquisition of Plarium allows Aristocrat to expand our addressable market into logical adjacent segments in the fast growing mobile gaming market. This immediately expands our addressable market from ~US$3.2bn in the Social Casino segment, to US$25.4bn when including the Strategy, RPG and Casual segments. It also provides us with a stronger platform to target the ~US$43.6bn overall mobile and web games market as growth segments.

“The strategic and financial benefits are compelling for Aristocrat shareholders. Following the acquisition of Product Madness in 2012, Aristocrat’s Digital division experienced exceptional growth and Product Madness is now a top 5 social casino gaming publisher globally. Plarium provides a unique opportunity to continue and accelerate this growth by diversifying into attractive new mobile gaming segments, including Strategy, RPG and Casual. The acquisition of Plarium increases our pro forma Digital revenue contribution from 14% to 22% for the year ended 31 March 2017."

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