Australian slot machine maker Aristocrat Leisure Ltd. has struck a deal to buy U.K. gambling software developer Playtech PLC for $3.7 billion in a transaction that will create one of the biggest business-to-business platform providers in the global gaming industry.
The deal, which was agreed upon on Sunday, will be finalized if the two parties will agree to the further terms and conditions of the deal. Once resolved, Aristocrat’s wholly-owned subsidiary Bidco will be the acquiring party.
In a statement, Aristocrat CEO Trevor Croke 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 offered to buy Playtech’s ordinary shares at $9.35 per share which is a 58% premium of its October 15th closing price. At that price, the total issued common shares of Playtech would have a fully diluted value of around £2.1 billion or £2.7 billion using the enterprise value basis.
To fund the deal, Aristocrat will raise AUD $1.3 billion or $961 million dollars in a share sale. The company will be offering the shares at an 8.6% discount from its closing price last Friday. Aristocrat says it has received letters of intent and irrevocable undertakings supporting the deal from investors representing 20.7% of Playtech’s outstanding shares, including its biggest shareholder.
Playtech’s Aggressive Expansion
The deal comes at a time when Playtech was aggressively expanding in the United States and Latin America. According to Playtech CEO Mor Weizer, the sale has the potential to enhance their company’s distribution and their capacity to build new and deeper relationships with partners to boost their technological capabilities.
Meanwhile, Playtech also announced that it has entered into a definitive agreement with Hong Kong-based Gopher Investments to sell its financial trading division Finalto in a cash deal worth $250 million.