Aristocrat will acquire Playtech shares in an all-cash deal at a price of 680 pence per share. This represents a premium of 58.4% to the closing price of Playtech shares on October 15, the day before the acquisition announcement. It is also a premium of 66.0% to the volume weighted average closing price per share over the three-month period leading up to October 15, as well as a 55.0% premium to the weighted average price over the past 12 months.
Aristocrat believes that the combination of the two companies will bring significant benefits, particularly in the igaming and online sports betting segments. They expect this partnership to drive medium-term revenue and earnings growth, especially in the North American online real-money gambling market. The combined business will have a presence in 24 countries and territories, with seven content studios globally, and operations in 30 regulated jurisdictions with 170 global licensees.
In addition, the deal will allow Aristocrat and Playtech to meet a wider range of customer and player needs by leveraging their distribution, technology, and content. Playtech’s Snaitech business also brings a B2C presence in multiple European markets.
The acquisition is expected to generate attractive financial returns and boost the combined business’ share price. The closing of the deal is subject to various regulatory approvals and closing conditions, including the approval of at least 75% of Playtech shareholders. The Playtech board intends to recommend the deal for approval.
As of now, Aristocrat has received irrevocable undertakings or letters of intent for approximately 20.70% of Playtech’s issued ordinary share capital. The acquisition is anticipated to close in the second quarter of 2022.
Aristocrat CEO Trevor Croker believes that the combination of the two companies will create a true industry leader in the global online real-money gambling space, particularly in terms of their B2B capabilities. Playtech CEO Mor Weizer sees this deal as an exciting opportunity for the growth of Playtech, with significant benefits for stakeholders. He believes it will enhance their distribution, build deeper relationships with partners, and strengthen technological capabilities.
Aristocrat plans to fund the acquisition through existing cash resources, new debt facilities, and an equity offering of Aristocrat ordinary shares. Playtech recently agreed to sell its financial trading division, Finalto, to Gopher Investments for $250 million. This decision comes after shareholders rejected a previous bid led by the Barinboim Group.
Furthermore, Aristocrat has been expanding its digital games business with the acquisitions of Futureplay and Playsoft, as well as the establishment of a new development facility in Finland. These additions will support their efforts in the casual gaming and social casino markets.
