Aristocrat to acquire Playtech in multi-billion dollar deal

by Mia Chapman Last Updated
Aristocrat to acquire Playtech in multi-billion dollar deal

An Australian poker machine maker is set to splurge billions on the acquisition of a British gaming software developer.

Yahoo Finance reports that Aristocrat is buying Playtech Plc in a deal worth A$5 billion (US$3.7 billion).

The offer values the London-listed Playtech at $9.35 per share, a premium of about 58 per cent to the company’s last closing price on October 15.

Shares in Playtech rose as much as 57 per cent off the back of the news.

Aristocrat will raise A$1.3 billion in a share sale to help fund the acquisition, the Sydney-based company said.

The stock will be sold at an 8.6 per cent discount to Friday’s closing price.

The deal will add immediate scale to the Australian casino poker machine manufacturer in the fast growing world of online gambling and sports betting, which it estimates was worth $70 billion globally last year.

The transaction will create one of the largest business-to-business platform providers in the global gaming industry, Aristocrat said.

“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,” Aristocrat chief executive officer Trevor Croker said.

The deal would mark the latest in a long list of tie-ups aimed at staking out an early advantage in online gambling, which was already deregulating across the United States before a flurry of new players exploded during pandemic lockdowns.

Aristocrat 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 boom, the company said.

Aristocrat has received letters of intent or irrevocable undertakings in support of the deal from investors that own about 20.7 per cent of Playtech’s outstanding shares, including its largest owner, it said.

Deal links Aristocrat to Italy and the European continent

This latest deal by Aristocrat already creates a new regulatory risk for the company, which provides a way into the global gaming market, where it will take control of Playtech’s Italian betting shops, gaming parlours and online operations.

But beyond that, the deal underscores Aristocrat’s reputation as one of Australia’s most enduring global leaders, a company whose ability to stay at the top of competitive international markets through some seismic shifts in conditions is probably underappreciated in its home market.

Playtech’s business-to-customer division, which is based around Sniatech, that offers punters the chance to gamble on poker machines, sports, horse racing and a range of online games is interesting in that it represents a new step for Aristocrat from infrastructure supplier to gaming and wagering operator.

While the European focus of this business means Aristocrat won’t go up against big US casino operators, there’s no doubt the business-to-consumer expansion will create a new level of regulatory risk for the company and for investors to get their heads around.

But Snaitech isn’t the main strategic prize inside Playtech, it’s the London group’s business-to-business division that they are focused on.

This business unit is a platform and technology provider for more than 170 online gaming operators in the RMG sector, including sports betting giants such as Entain, Flutter and Bet365.

Playtech positions itself as a one-stop shop that can deliver games management systems, loyalty and VIP programs, risk and fraud tech, data analytics and game content for all sorts of online and for-money games. 

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