Playtech completed discounted initial payment for PTTS acquisition

Pursuant to the acquisition of PTTS, which was announced on 10 March 2011, the company agreed to pay Worldwide Online Enterprises, an initial cash consideration of 140 million euros in broadly equal, non-interest bearing half-yearly instalments over the 30 months following completion of the acquisition in July 2011.

Playtech has agreed with WOE to aggregate the outstanding balance of the Initial Consideration into one payment of 76 million euros, which reflects a discount to the net present value of the outstanding balance. Playtech is utilising part of its available banking facilities in order to finance the payment of the Discounted Initial Consideration.

This Discounted Initial Consideration will not affect any amounts which may become payable under the earn-out provisions agreed at the time of the acquisition of PTTS, (defined as the Additional Consideration in the announcement of 10 March 2011).

The Board believes this transaction is prudent and makes economic sense. PTTS's performance since acquisition has been very strong and the first quarter of 2012 has been outstanding. As a result, there is an increased likelihood of payment of the Additional Consideration to WOE of 140 million euros, in accordance with the original terms of the acquisition. Partly as a result of this strong performance, Playtech anticipates being able to repay the banking facilities drawn for the Discounted Initial Consideration within a short period of time.

Transaction highlights

 -Consolidation of outstanding instalments of initial consideration of 80.2 million euros into one accelerated payment of 76 million euros, representing a nominal discount of 5.2%
-Payment to be funded from the group's existing debt facilities
- Represents a discount to the net present value of the total outstanding payment using the Group's actual borrowing rate
-Strong performance of PTTS business since acquisition
-Consolidation of payments represents a Related Party Transaction under AIM Rules for Companies