Aristocrat Paving Road To Success By Acquiring Playtech For $2.9bn

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by Ryan White
| 29/10/2021
Aristocrat Acquires Playtech

Aristocrat and Playtech are ready to tie the knot. In the world of Business2Business casino game manufacturers, the news is huge. Aristocrat is ready to transfer $2.9 billion into Playtech's account as part of the acquisition deal they have recently agreed upon. Combined, the two gambling companies plan on offering a broader portfolio consisting of top-notch end-to-end solutions for passionate gamers in all parts of the globe.

Let's see exactly what this acquisition means for the world of gambling and why we should keep a close eye on it.

Who Is Aristocrat Leisure?

Aristocrat Leisure is the second biggest land slot machine manufacturer on the planet and Australia's pride and joy. With a humble beginning in 1953, the company now serves the needs of a massive plethora of players Down Under, New Zealand, as well as 90 other countries worldwide with quality offline and online casino products. If you've ever been to Vegas, you must have seen their Buffalo slot in every casino you set foot in, as it's the most popular classic slot you will find in Sin City.

If you've spent a fair amount of time playing online, you most definitely came across top Aristocrat online pokies like Queen of the Nile, Zorro, Big Ben, or Pompeii. The Australia-based provider has won the title for the Casino Product of the Year for the highly successful Walking Dead slot. Their innovative products, advanced technologies, and cool graphics propel them on top of many gamblers' list of casino game providers.

Aristocrat also owns Big Fish Games, a large video game creator and distributor for casual players. In August 2021, Aristocrat officially expressed its plans to expand its business revolving around digital games after agreeing to acquire Playsoft and Futureplay. These are two gaming studios dedicated to mobile games. Aristocrat also has plans to open a fresh development venue in Finland.

Who Is Playtech PLC?

In order to understand Aristocrat's interest for Playtech PLC, we should first quickly go over the main highlights of this provider. Playtech is also an irrefutable gambling market leader running the biggest purpose-built live casino venue in the world.

The company is also busy being one of the most successful suppliers for online casino software with operations in 24 countries and counting. Age of Egypt, A Night Out, Age of the Gods, Beach Life and Fruit Mania are just a few of their most popular pokies you can find at top real money casinos.

Prior to the company being acquired by Aristocrat, Playtech had plans to sell Finalto, the financial division of the company. Its investors finally agreed to sell Finalto to Gopher Investments for no less than $250 Million, with the main purpose of spending more time working on its main gambling business. This was in spite of their original 2019 idea to divest because of their poor performance.

What Does Aristocrat's New Playtech Acquisition Mean For The Industry?

Aristocrat will be paying around $2.9 billion to acquire Playtech Plc as part of a deal focusing on enterprise value. The acquisition is expected to be fully closed close sometime in the second quarter of 2022. As part of the deal, Playtech's three studios will be merged with the Aristocrat Digital division. This division will primarily focus on developing social casino as well as casual gaming products.

Superior Financial Results

The deal is projected to deliver appealing financial returns. This should boost the share price of the two businesses in the low/mid-single digit range prior to the synergies being achieved. Post synergies, the same share price is expected to reach mid/high-single digits.

Adding More Material Scale

Aristocrat expects the acquisition to bring it the “material scale” it was looking for in segments like sports betting and iGaming. The deal should deliver mid-term revenues and also trigger more earnings, with special emphasis on the North American online segment of real money gameplay.

More Industry Workplaces

The synergy of the two gambling giants combined will generate workplaces for an impressive number of staff members in 24 countries, with the inclusion of 7 content studios at a global level. The two companies also plan on operating in 30 jurisdictions regulated by 170 global licensees.

Fresh B2C Edge

Aristocrat claims the same historical deal would enable both of their technology, distribution, and content to fulfil much more player needs. Plus, Playtech’s Snaitech group that focuses on the field of business will also add a much-needed Business-to-Consumer edge in several European countries.

World-Class Content

Trevor Croker is the Chief Executive at Aristocrat. In an official statement, he recently said that the Playtech acquisition would mix the “world-class” gaming offers, customer and regulatory connections of his group with the “industry-leading” virtual platform for gambling belonging to Playtech. This will result in a much richer gaming portfolio and display of end-to-end solutions dedicated to passionate customers in the gaming market in Australia and other parts of the world.

Establishing Momentum

The same deal is expected to establish momentum and generate a genuine leader in the gambling industry. Playtech's CEO Mor Weizer referred to the new connection as an ”exciting opportunity” in the upcoming growth stage of the company with important stakeholder advantages.

Aristocrat Buys Playtech: What Should Players Expect?

If you are a fan of one or the other of these huge gambling giants, you should wait for best-in-class types of products and services dedicated to all gaming and sports betting sectors. In other words, get ready for some unparalleled games, customer support solutions, and advanced technologies on your favourite gambling platforms powered by the two providers, and an overall top-notch experience.

Final Considerations

Aristocrat plans on funding its acquisition using a mix of new debt money, existing cash the group has access to, as well as an equity offering consisting of the company's ordinary shares. The acquisition is still subject to a series of legal approvals, including a minimum of 75% approval from Playtech shareholders, and complex closing conditions. Nonetheless, the group's board will recommend shareholders to approve the deal. The news has already generated Playtech's stock to rise sharply from $5.65 on the 13th of October to $9.51 on the 18th of the same month. Aristocrat also traded higher in light of the acquisition news.

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