Playtech acquires PT Turnkey Services

The acquisition, which is subject to satisfaction of certain regulatory and other customary conditions, is due to complete on 30 June 2011. 

The acquisition will enable the Group to be a single source supplier of online gaming solutions, particularly to the growing number of new entrants targeting regulated online markets. These opportunities are in line with Playtech's strategy to focus on regulated markets which are expected to be the most important in the changing gaming industry. The Directors believe the acquisition places Playtech in an extremely advantageous position

It also allows the Group to own outright a wide range of affiliate service providers which already provide services to the Group's licensees, ownership of which will significantly enhance its commercial proposition and competitive position in the expanding online gaming marketplace
 
The initial consideration of US$ 194 million will be paid in cash in broadly equal half yearly non-interest bearing installments over a period of 30 months following completion. Further consideration based on the Target Group's performance in the 3 years following the completion of the integration process, which is expected to be no later than December 201, will become payable in cash, to the extent that 7 times the adjusted EBITDA of the Target Group for 2014 exceeds the Initial Consideration.

The additional consideration is capped at US$ 194 million and will be paid in four broadly equal non-interest bearing installments over the 18 months following the determination of the additional consideration
 
On completion the Target Group will provide marketing and ancillary services to operators of online gaming businesses. These will comprise four separate service divisions - marketing, operations, payment advisory and network management - and will employ over 850 staff, the majority of which are based in Bulgaria and the Philippines.

The marketing services division has 5 clients - 4 of which are in regulated and soon to be regulated markets, all of which are existing Playtech licensees, and the remaining divisions have contracts with over 60 clients. The Target Group and Playtech share a common client base.