Aristocrat Leisure Ltd. has confirmed its cash offer of around $3.7 billion to acquire Playtech Plc, a developer of content for the land-based and online gaming industries. The amount is a premium of 58% on Playtech’s last closing price on Friday at the time of the offer.
Confirming the news earlier today during a presentation to the Australian Securities Exchange, Aristocrat argued that acquiring Playtech’s assets will result in the growth of Aristocrat’s addressable market by an estimated 50%, in the land-based segment alone. The opinion is shared by Aristocrat’s executives with company chief executive and managing director Trevor Croker reportedly saying in a brief:
“The proposed combination would bring together Aristocrat’s world-class gaming content and customer and regulatory relationships with Playtech’s industry-leading global online real-money-gambling platform – business-to-business – and European business-to-consumer footprint.”Aristocrat CEO Trevor Croker
Aristocrat estimates that the global real money gaming segment reached $70 billion in 2020 with the numbers improving year-over-year and set to continue growing through 2025. Aristocrat is confident that this transaction would lead to the formation of one of the most significant players in the sector.
Pivoting to New Markets and Funding the Operation
Through their combined footprint, Aristocrat and Playtech would be able to service a customer base sprawling well across the world with end-to-end solutions for gaming enthusiasts anywhere in the world. The merged assets would lead to more seamless user experiences as well as a bigger focus on innovation while observing responsible gambling practices, Croker explained.
Aristocrat is confident that the move would result in added value for stakeholders who would benefit from “the fairest possible structure for Aristocrat shareholders.” The company is also prepared to raise additional $965 million equity to fund the operation. The rest of the money will come through existing cash to the tune of $816 million and a term loan worth $2.05 billion.
Croker continued by arguing that the businesses would benefit by merging their executive expertise which will result in boosted results for the RMG segment.
Aristocrat is confident that Playtech will open a new avenue of opportunities for Aristocrat as the company seeks to pivot towards the North American and European markets, in which Playtech has B2B capabilities already. Aristocrat shares were stopped from trading earlier today as the details of the deal are being established.