Playtech has confirmed that it is divesting its financial trading division Finalto through a definitive agreement between Gopher Investments and the company. Gopher Investments should acquire the division for the sum total of $250 million in cash and the deal now enjoys the full approval of Playtech’s board, citing shareholder interest and the company’s general direction as the reasons behind the sale.
Shareholders Go with Gopher Group over Barinboim Group
The announcement comes a month after Playtech shareholders shot down a competitive proposal by Barinboim Group, and backers Leumi Partners and Menora Mivtachim Insurance, who also tried to purchase the division. At the time Playtech was skeptical about Gopher’s proposal and had recommended to shareholders to go with Barinboim instead. Close to 70% of shareholders voted against the bid which restored Gopher as the principal option once again.
The deal should be completed in the first half of 2022 with the transfer subject to customary closing conditions and regulatory approval. Playtech, which has a long and well-established lineage in financial trading, has been in the process of shifting attention to the business and consumer gambling markets through its B2B and B2C divisions.
The present agreement follows on the company’s plans to divest from financial trading with Gopher Investments and Playtech first entering negotiations back in May. The company hopes to increase the predictability and stability of its cash flows through its core operations moving forward.
Time to Streamline Business and Focus on Gaming
Finalto has faced some difficulties of its own as well, with EBITDA generating a loss of $600,000. Playtech CEO Mor Weizer hailed the transaction as an opportunity to simplify the overall group focus.
“I would like to thank everyone at Finalto for their tremendous contributions to Playtech and wish them every success. We are pleased to recommend this transaction to our shareholders, and we remain well placed to capitalize on the exciting market opportunities ahead, driving sustainable growth for the benefit of all our stakeholders,” Weizer added.
The deal was welcomed by TT Bond Partners, where Gopher sits as an affiliate. Partner Teresa Teague was positive about the partnership and argued that the company was confident in Finalto’s business strength and impressed by its management team.
Gopher, which is also a stakeholder in Playtech, is pleased to carry out the transaction and create additional value to fellow stakeholders, Teague explained. The final agreement was subject to some deliberation as Playtech had to delay a general meeting in order to have a better idea of what Gopher’s proposal encompassed and what the motivation behind the proposed sale value was at the exact time the Barinboim Group consortium made a bid for the unit, which ultimately failed.