Following the news of the proposed acquisition of casino content provider, Playtech, by Australian slot-machine developer, Aristocrat Leisure Ltd – Playtech’s shares have skyrocketed by almost 60% on Monday. The deal is said to be worth $3.7 billion and places Aristocrat in a position to unlock the United States gambling market.
This is so because Playtech, listed on the London Stock Exchange, has recently entered into a multi-state agreement with Unibet Interactive, hence expanding its award-winning RNG casino games in New Jersey with additional states to follow.
Aristocrat further hopes to benefit from Playtech’s strong presence in North America and in Europe, which it expanded through the Snaitech takeover in 2018.
Online gambling and sports betting in the United States has long undergone debate as to whether or not to legalize it, and legislations have already been passed, allowing the activity in certain states, given the increased interest of online gambling activity since the pandemic lockdowns. This deal gives Aristocrat the opportunity of an early advantage in the country, while providing growth channels for the business.
Josh Rosen, analyst at United First Partners LLC, said the offer for Playtech “is the latest example of incumbents scrambling to arm themselves with the technology to harness a burgeoning online market opportunity, amid a global gaming sector now exhibiting near-constant consolidation.”
The proposal for Aristocrat’s acquisition of Playtech was taken to the Playtech board for a vote, and received unanimous backing by all shareholders and chief members of the European software provider.
In a statement made by Aristocrat on Monday, the offer values Playtech at $9.35 per share, a 58% increase since the company’s last closing price on 15 October. It also said that it expects to realise additional earnings per share in the high single digits in the year after purchasing Playtech.
Commenting on the acquisition, Trevor Croker, CEO of Aristocrat said, ““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”, he continues.
“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”, Croker concludes.
Also having their say, Playtech’s CEO, Mor Weizer said, “This deal has the potential to enhance our distribution, our capacity to build new and deeper relationships with partners, and bolsters our technological capabilities,”
“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,” Weizer adds.
In an update to investors last month on H1 developments, Weizer was thrilled with Playtech’s strong operational and strategic progress to date, in spite of the challenges brought about with the pandemic. He believes the favorable results demonstrate the quality of Playtech’s products and technologies.
Aristocrat and Playtech expect this monumental deal to be completed in the second quarter of next year.