Playtech is a leading supplier of online casino software on a global scale and as such, it covers a wide range of services including but not restricted to provision of ancillary services for land-based and online gambling businesses, software licensing and development, etc.
Live gaming, bingo, poker, casino and mobile features are to be found among its gaming applications. Today, the company can take pride in being successfully run by management committed to further consolidating its positions on the market and making it the indisputable leader worldwide.
The year 2015 will be remembered for the great number of Playtech licensees that got awarded for the exceptional services they provide players with. Gala Coral won the award for the best Bingo operator and the Best Mobile Bingo operator. Paddy Power scooped the Casino Operator of the Year award. SkyBet, William Hill and bet365 were also honored. In addition, Betfair and Paddy Power, both Playtech licensees, have joined forces with the aim of keeping their leading positions on the UK online gambling market.
Those who keep themselves informed about Playtech’s affairs are well-aware that the year 2015 was quite an eventful one as far as mergers and acquisitions are concerned. Although it is questionable whether Playtech benefited from the arguments and collapsed deals it was involved in, it has at least managed to boost its profits and ink several promising contracts.
YoYo Games Acquisition
At the beginning of 2015, Mor Weizer, chief executive officer of Playtech, has firmly stated that the company was about to complete several acquisitions throughout the year. The first one was signed in the middle of February when the Scottish developer YoYo Games was acquired by Playtech for the amount of $16.4-million. Playtech was pointed as the most appropriate partner capable of making the GameMaker: Studio even more effective and popular.
Playtech, on its side, promised to invest a considerable amount of money into making the GameMaker tool more user-friendly and efficient. The result of the joint venture was the release of the enhanced GameMaker 2.0.
Playtech Acquires TradeFX
The next deal in the list was Playtech’s acquisition of TradeFX. The latter is a popular forex trading platform and Playtech became the major stakeholder for the amount of €208 million. In case all targets are met by 2017, Playtech is to pay the remaining amount of €250 million. In point of fact, the trading platform was owned by Teddy Sagi who is also known as the largest Playtech stakeholder. Although this is not the first related-party transaction Playtech makes, the TradeFX purchase managed to attract a lot of opponents who were not particularly happy about the deal. Yet, Teddy Sagi was defined as a reliable person, armed with knowledge and ambitions to work for Playtech and the other shareholders’ well-being.
Apple Watch App and Ladbrokes Omni-Channel Release
At the end of April, it was announced that Playtech was going to release a special sports betting app compatible with the new Apple Watch. Admittedly, this move approved of the statement that Playtech is well-ahead of its rivals when it comes to providing top-notch products. The rapid expansion of the omni-channel offering was yet another reason confirming that assertion.
Three months amid the announcement about the Apple watch app, Ladbrokes revealed that its first omni-channel has been developed by Playtech. As a result, Ladbrokes was able to make its sportsbook compatible with various digital devices. What made Ladbrokes choose Playtech over some other suppliers was the fact that the speed and efficiency of the mobile features needed improvement and Playtech was said to be among the few prepared to deliver the expected quality.
The first days of November become quite significant for Playtech as Playtech ONE was integrated into Mecca Bingo product offering. The launch of the omni-channel system was expected to maximize profits and strengthen Mecca Bingo positions on the oversaturated UK market.
Plus500 and AvaTrade Deals Termination
Unfortunately, Playtech experienced the collapse of two major deals worth more than £500 million. The deals for the acquisition of Plus 500 and AvaTrade were terminated due to regulatory opposition. However, Playtech representatives were reluctant to provide details on the matter.
According to the released information, Playtech has abandoned the Plus 500 deal due to pressure from the Financial Conduct Authority. Its members questioned the acquisition, but Playtech did not specify the essence of the concerns raised by FCA.
People with knowledge on the matter claim that FCA members were not delighted with the Playtech involvement in the CfD industry. The Financial Conduct Authority members also found faults related to the anti-money laundering identity checks. Playtech attempted to acquire Plus500 at a time when the AIM industry was in a serious crisis and as a result, customer accounts were frozen.
Although Playtech officials immediately took actions towards remedying the situation, it turned out that the proposed solutions were not found reliable by the FCA officials. Playtech had it until December 31st to complete the deal but since it became evident that the issue is not to be resolved soon, its termination was announced.
The scrapped acquisition made market analysts lower their predictions concerning Playtech’s adjusted profit for 2016 from €390.8 million to €290.4 million.
Soon after, Playtech announced the £69 million deal termination with the Irish broker AvaTrade. The deal met the opposition of the Central Bank of Ireland but once again Playtech officials did not reveal the main reason for CBI’s dissatisfaction.
However, Playtech was not financially penalized for the deals termination. The only loss the supplier suffered was the $5 million non-refundable deposit given for AvaTrade’s purchase.
In point of fact, the AvaTrade and Plus500 deals were regarded as critically important to Playtech’s further expansion. The deals termination was defined as disastrous for company’s credibility. Playtech officials have recently announced that they will continue to object CBI’s decision as everything was narrowed down to a matter of principle.
Playtech is considered one of the most active buyers on the market, but it is important to note that the majority of companies it acquires are backed by Mr. Sagi, the major Playtech stakeholder. However, AvaTrade and Plus500 deals were different since Mr. Sagi was not involved in companies’ affairs in any way.
Currently, none of the Playtech officials has revealed company’s plans for future mergers and acquisitions but according to market analysts, Playtech will end the year with a net cash amounting to €995 million, which can be spent on potential purchases.
