Aristocrat’s $5bn bid for Playtech to follow punters from casinos to virtual gaming rooms

Aristocrat Leisure is laying foundations to become a global leader in the $94.4bn real money gaming industry with its $5bn bid for Playtech.

Aristocrat has lobbed a $5bn bid for Playtech to provide punters with more content wherever they choose to gamble.

Poker machine maker Aristocrat Leisure has lobbed a $5bn bet on acquiring UK online gambling software and content supplier Playtech to supercharge its strategy of following punters wherever they go, from casinos to mobile phones.

Playtech boasts that it can “only” allow gamblers to “play any game, on any platform and on any device, using a single wallet and single account, anywhere and at any time”.

It comes after a tumultuous 18 months for gaming operators, with pokie venues and casinos forced to shut their doors during the Covid-19 pandemic, even powering down Las Vegas’s famed strip early in the global outbreak. At the same time, online gaming has surged.

Aristocrat chief executive Trevor Croker said acquiring Playtech would provide Aristocrat with “material scale” in the $US70bn ($94.4bn) online real money gaming industry.

“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,” Mr Crocker 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.”

Aristocrat has engaged Goldman Sachs as an adviser on the transaction, with the investment bank also working on a $1.3bn equity raising to fund the deal for Aristocrat along with UBS. Shares are being sold in an entitlement offer at $41.85 each after the stock closed on Friday at $45.79.

It will fund the rest of the transaction using $2.8bn debt from the Term Loan B market and $1.1bn from existing cash.

The offer values Playtech’s entire issued and to be issued share capital at approximately £2.1bn ($3.9bn) on a fully diluted basis, and represents a premium of approximately 58 per cent to the last closing price of Playtech on the London Stock Exchange.

Mr Croker said the acquisition represents a valuation multiple of 11.4 times Playtech’s adjusted earnings before interest, tax, depreciation and amortisation for the year to June 30, 2021.

Meanwhile, Aristocrat expects its net profit after tax and amortisation to be $864m for 2021.

Mr Croker said the company has received “irrevocable undertakings from Playtech shareholders” including from Playtech’s largest shareholder — which has a 20.7 per cent stake — to vote in favour of the scheme.

“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,” Mr Croker said.

“Adding Playtech’s talented team with Aristocrat’s established strengths and momentum will create a true industry leader in the global online RMG (real money gaming) space, particularly in terms of our B2B (business to business) capabilities.

“The proposed acquisition continues Aristocrat’s approach of investing in medium to long-term grow.th and we are extremely excited by the opportunities that this will bring for our shareholders, people, customers and players.”

Playtech has grown to become one of the world’s biggest online software gambling suppliers developing platforms and content for the gambling industry operating from 24 countries. It was founded in Tartu, Estonia 22 years ago.

“The Playtech journey began in 1999, back when online gaming was in its infancy. Nearly 20 years on, the industry has seen huge changes – but one thing that hasn’t changed is our passion for pioneering content, software and platform technology development,” chief executive Mor Weizer said on the company’s website.

“From our world-first omni-channel systems to the industry’s largest purpose-built live casino facility, we’re constantly reinventing the rules to adapt to player behaviour and key market trends. Having been part of Playtech for more than a decade, I’m still excited about the opportunities we have to grow and innovate.”