Aristocrat poised to unlock US market potential via proposed $3.7bn Playtech acquisition

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Playtech looks set to be acquired by Australian gaming firm Aristocrat Leisure in a deal reportedly worth $3.7bn. The European gambling software provider is highly active in the US gaming space, having just entered into a multi-state agreement with Unibet Interactive, a part of Kindred Group

The proposed acquisition has been given unanimous backing by the Playtech board which recommends that shareholders vote in favor of the deal. Aristocrat will fund the transaction with an equity raising worth $1185.54m, alongside new debt and existing cash.

Aristocrat CEO and MD Trevor Croker outlined the rationale behind the acquisition, saying: “The proposed combination would bring together Aristocrat’s world-class gaming content and customer and regulatory relationships with Playtech’s industry leading global online RMG (real money gaming) platform (B2B) and European B2C footprint.

“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.

“Additionally, the business will be ideally positioned to unlock sustainable shareholder value by seizing opportunities in the fast-growing global online RMG segment as they continue to open up, particularly in North America.”

Playtech CEO Mor Weizer believes that the acquisition marks an exciting opportunity in the next stage of growth for the firm; one that delivers significant benefits to stakeholders, customers and shareholders.

“This deal has the potential to enhance our distribution, our capacity to build new and deeper relationships with partners, and bolsters our technological capabilities,” he said. “The combination of our two companies builds one of the largest B2B gaming platforms in the world, with the people, infrastructure and expertise to provide our customers with a truly best-in-class offer across all areas of gaming and sports betting.”

Playtech Chair Brian Mattingley noted: “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.”

For Aristocrat, the move will facilitate greater access to the US gaming sector, with North America currently the biggest driver of growth for the Playtech business, helping H1 2021 revenue surge by 106% to $54.4m.

Updating investors on H1 developments last month, Weizer commented: “I am delighted by our strong strategic and operational progress to date in 2021, despite the ongoing challenges posed by the pandemic. These results demonstrate the quality of our technology and products, the significant progress made against our strategic priorities, and wider momentum across Playtech’s operations. 

“Significant progress in the US saw Playtech launch for the first time in Michigan, the first step in our long-term multi-state partnership with Parx Casino, and regulatory approvals progressed in key strategic states. 

“Structured agreements continue to deliver in Latin America, with strong growth in H1 in Mexico and Colombia and launches in Panama and Costa Rica.”