n a face to face interview with the Financial Times' Mergermarket news service, Barak said that mergers and acquisitions played an important role in increasing growth for the company, and that Playtech was not "shy to talk about acquisitions".
He said that the company has a call option, based on a 5.5x multiple over annual profits of us$ 500 million, which is to expire in March 2011 and could be exercised in 2010 to purchase a company, with an as yet un-named marketing company currently being considered. He claimed that Jefferies and Deutsche Bank were already advising on the potential deal.
Barak said that the deal would be two or three times bigger than Playtech's recent collaboration with William Hill last year, which he described as "unique in its financial structure, but not in terms of cash expenditure". He said that Playtech could now afford a half a billion dollar acquisition using its current credit facilities.
Playtech is also said to be assessing four smaller targets, including a hosting provider, a customer services specialist and a payment advisory firm, with the company's management additionally planning to finalise between 10-15 licence agreements during 2009.
Barak said that the firm would not bid for distressed gaming operators such as Spain's Codere, and confirmed that the company would stick to its core business in software development, and not operational activities.
"As a pure software supplier, we have no intention of going into operations, as it would create a conflict of interest. We could only consider a minority stake investment in a gaming operator, but this is unlikely to happen in the short term," said Barak. "Our 800 employees are entirely focused on software development, which gives us a competitive advantage over our rivals."