- GeneralM&A
- October 18, 2021
- 6 minutes read
Deal: Australia’s Aristocrat To Buy Playtech For $3.7B
The online gambling industry is hot this year, with billion-dollar deals now a frequent occurrence. The latest billion-dollar deal is…
The online gambling industry is hot this year, with billion-dollar deals now a frequent occurrence. The latest billion-dollar deal is Playtech, a London-listed online gambling company, selling to Aristocrat Leisure, an Australian gambling machine manufacturer.
Playtech was founded in 1999 by Israeli entrepreneur Teddy Sagi. However, he sold off all his shares in the company in 2018 and won’t profit from this deal. Don’t cry for him though, he made other shrewd investments that bestowed him with a net worth nearing $6bn (Forbes estimate).
- Aristocrat (ASX: ALL) has agreed to buy Playtech (LON: PTEC) in a deal worth £2.7bn ($3.7bn). The Australian firm will pay $2.9bn to buy all outstanding Playtech shares and assume $800mn of the firm’s debt. It’s paying 680 pence in cash per Playtech share, a 58% premium to the company’s share price before the announcement.
- Following the announcement, Playtech’s share price jerked up, expectedly. It rose 57% on Monday to hit 678 pence, just shy of the 680-pence per share acquisition mark.
- Playtech is not a gambling operator but instead develops software used by online gambling outlets. It’s strategically selling shovels in the online gambling gold rush spurred by the pandemic.
- For Aristocrat, it’s a vital acquisition, giving the company a foothold in both the online gambling software market and making physical gambling hardware. Seeing it that way, it’s no surprise the company is paying a significant premium to buy Playtech.
- To help fund the deal, Aristocrat says it’ll raise $960mn from a block share sale at a significant discount to their current trading price. The company is apparently keen on buying Playtech to partake in the booming online gambling market.
The online gambling sector has seen a flurry of deals this year. They include DraftKings buying online casino Golden Nugget Online for $1.6bn in August and Endeavor Group Holdings buying OpenBet, a British gambling software provider, for $1.2bn this very month.
This year, the mother of online gambling deals is also in the works; DraftKings has offered $22bn to buy Entain Group, a British sport betting giant.
