Aristocrat Leisure to buy online gambling giant Playtech for $5 billion

Aristocrat Leisure to buy online gambling giant Playtech for $5 billion

Australian pokies maker Aristocrat Leisure (ASX: ALL) is looking to buy online gambling company Playtech for $5 billion and raise substantial capital to do so, as it looks to build up a global portfolio of real-money gaming (RMG) products.

The offer, which values Playtech’s entire issued and to be issued share capital at approximately $3.9 billion, has been recommended by Aristocrat’s board and is also backed by Playtech’s largest shareholder.

On an enterprise value, the deal is worth $5 billion and will be funded via a $1.3 billion entitlement offer to Aristocrat shareholders, $1.1 billion of existing cash, and a $2.8 billion loan.

Founded in 1999, Isle of Man-based Playtech is an online gambling software supplier with more than 7,000 employees across 24 countries, 170 global licensees and is regulated in 30 jurisdictions.

Operationally, Playtech designs, develops and distributes software and services to the online gambling industry, covering all key online RMG segments including casino, poker, bingo and sports betting, monetising via a revenue share model.

Aristocrat CEO and managing director Trevor Croker said the proposed acquisition would bring together the Australian company’s “world-class” gaming content and customer and regulatory relationships with Playtech’s online RMG platform.

“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,” Croker said.

“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.

“The recommended offer is a full and fair value and reflects the strategic potential of the combination in a global gaming sector that continues to migrate online, as a result of technology and entrenched consumer-driven change.”

To partly fund the acquisition Aristocrat will raise $1.3 billion, with investors able to buy new shares at a price of $41.95 per share.

The offer price represents an 8.6 per cent discount to the last closing price of $45.79 per share on 15 October 2021 and will close on 19 October.

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