Apart from being a leading provider of omni-channel offering for the global gambling industry, Playtech has also made its name as one of the companies within the field to be particularly active on the acquisition front. And if 2015 was the year that saw the Isle of Man-based supplier boost its newly created Financials division with the purchase of key entities, it seems that it has focused more of its attention to expanding its gaming business this past year.
Competition within the gambling industry has been growing at immense pace over the past decade. Technology innovation, the ever-changing regulatory environment, and the increasing number of companies entering the field has made it quite difficult for both providers and operators to cope with the numerous challenges posed to them.
Expansion through strategic acquisitions has become one of the ways for businesses to establish themselves, to cement their positions in their core markets, and to secure continued growth. The greater portion of merger and acquisition deals to have been closed over the past year or so have involved mainly major gambling operators. Yet, it could be said that Playtech has been a bit of an exclusion to the above trend. The provider has significantly expanded its business in 2015 and 2016 by acquiring entities based in different jurisdictions.
Playtech has sealed four acquisition deals this year. As mentioned above, the Isle of Man-headquartered company has mainly focused on enlarging its gaming division. Yet, it also boosted its Financials division in late November.
In May, the leading gambling provider acquired Swedish game development studio Quickspin AB. The gaming developer creates high quality slot games for both real-money gaming markets and the social casino field, and has been servicing some of the leading online gambling operators. Playtech is set to pay six times Quickspin’s EBITDA in 2018 or up to €50 million for the right to take control over the Swedish studio.
In mid-July, the company announced another major acquisition deal, this one again aimed at expanding its gaming business. Playtech purchased German self-service betting terminals provider Best Gaming Technology (BGT) for a total consideration of €138 million. BGT’s client base includes leading gambling operators William Hill, Paddy Power Betfair, Ladbrokes Coral, Betfred, and Codere, among many others, and its devices are available across the UK and Spain.
A third acquisition deal was announced in October when Playtech revealed that it would buy 90% in provider of bingo software and hardware solutions ECM Systems for the amount of £14.9 million. ECM Systems has been providing its offering to the UK retail bingo market. Major bingo operators Mecca Bingo and Gala Leisure have been among the company’s clients. The strategic deal positioned Playtech as one of the leading providers in UK’s retail bingo sector.
In late-November, the company made an important step towards strengthening its Financials division. Playtech confirmed the acquisition of a 70% stake in Consolidated Financial Holdings A/S. The latter is known to be a technology company providing Straight Through Processing brokerage services and solutions to international clients. Playtech said last month that it plans to acquire the remaining 30% interest sometime in 2019.
Expectations are that the gambling industry will undergo a new wave of consolidation in 2017, given the regulatory changes that are to take effect. This is why it is believed that Playtech’s shopping spree is probably far from over and that the company will be looking for new partners to secure a more than satisfactory position in the industry.
- Author
Olivia Cole
