To be completed in Q2, 2022

Aristocrat to acquire Playtech for $3.7B to compete in US online gambling market

Playtech agreed to a £2.7 billion takeover bid by Australian slot machine developer Aristocrat.
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Playtech's shares rose 57% on Monday after the agreement was done. The offer values Playtech at $9.35 per share, a premium of about 58% of the company's last closing price on Friday. The combination of both companies is expected to create one of the largest B2B platforms in the gaming industry. The Australian supplier seeks to seize opportunities in the global online RMG segment as they continue to open up, particularly in North America.

Aristocrat announced Sunday that its wholly owned subsidiary, Bidco, has reached an agreement to acquire the entire issue and to be issued ordinary share capital of Playtech. The acquisition was recommended by Playtech’s board. The companies expect the deal to complete in the second quarter of 2022, subject to shareholder approval.

The $3.7 billion transaction will be in cash. The offer values Isle of Man-based Playtech at $9.35 per share, a premium of about 58% to the company’s last closing price on October 15, according to a statement by Aristocrat. Shares in Playtech rose as much as 57% on Monday to $9.26.

The Australian slot machine manufacturer will raise a $1.3 billion in a share sale to help fund the acquisition. The stock will be sold at an 8.6% discount to Friday’s closing price. 

Aristocrat’s acquisition of Playtech is, according to the company’s release, “consistent with its growth strategy” and will create “one of the largest B2B platforms in the global gaming industry”.

The company also stated that the combination of both companies will bring about material scale in the iGaming and online sports betting segment; deliver medium-term revenue and earnings growth in the North America online RMG segment; expand both companies’ customer engagement and portfolio; and more. 

The Australian-based brand expects Playtech’s Italy-based omni-channel gambling operator Snaitech to open up new European markets at the same time as business in North America continues to grow. 

In an official release, Trevor Croker, Aristocrat’s Chief Executive, spoke about the acquisition and said: “The business will be ideally positioned to unlock sustainable shareholder value by seizing opportunities in the fast-growing global online segment as they continue to open up, particularly in North America”. And he added: “The combined group would offer a broad portfolio of end-to-end solutions for gaming customers around the world, as well as seamless player experiences, underpinned by a shared focus on responsible gameplay and innovation,”.

Mor Weizer, chief of Playtech, noted that the deal “has the potential to enhance our distribution, our capacity to build new and deeper relationships with partners and bolsters our technological capabilities”. 

Brian Mattingley, Chairman of Playtech, added: "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."

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