Isle of Man-based gambling software developer Playtech announced that it has disposed of all its shared in the online gambling group GVC Holdings at a price of approximately £200 million. Reportedly, the money accumulated with the sale is planned to be used for debt reduction and new acquisitions funding.
The online gambling software provider had been one of the largest shareholders in the British high-street bookmaker Ladbrokes, which was taken over by GVC Holdings in a £4-billion acquisition deal earlier in 2018. Initially, Playtech made the share purchase in its key customer Ladbrokes as a strategic investment and as a result, the company got a 3.4% stake in GVC at the time when the acquisition of Ladbrokes was finalised.
Recently, GVC Holdings has been having negotiations over the renewal of the contract between Ladbrokes and Playtech, under which the latter would be supposed to supply gaming technology to the bookmaker. However, Playtech has decided to sell down its GVC stake in order to seek possible new deals on its own.
Playtech Looking for New Markets and Opportunities
As far as the sale of the GVC Holdings’ shares is concerned, Playtech has revealed that the proceeds generated by the disposal are to be used for “general corporate purposes”, including merger and acquisition deals which could help the company to consolidate its positions. In addition, the amount of almost £200 million will be used by to company to reduce its debt raised as part of the Snaitech acquisition.
The online gambling software developer has further explained that it is to seek its own deals. Earlier in 2018, the company announced the acquisition of a majority stake in the Italian betting company Snaitech, with the price of the deal being estimated at more than €845 million.
As previously reported by Casino Guardian, the Isle of Man-based company has been facing some hurdles amid the increasing global scrutiny on gambling and gambling products. Regulatory authorities on a global scale are focused on imposing stricter measures on the sector in order to make sure that customers are protected from gambling-related harm.
Apart from increased regulatory scrutiny on gambling on a global scale, the recently imposed crackdown on controversial fixed-odds betting terminals (FOBTs) in the UK has been expected to have a negative effect on Playtech’s performance. The developer’s technology is used to power a large number of the machines, which have reportedly accounted for 5% of the company’s revenues. In case that the reduction of the FOBTs maximum stake from £100 to £2 leads to closure of betting shops around the UK, this could seriously hurt Playtech.
Considering the stricter regulatory rules imposed on one of the largest regulated markets where Playtech operates, the fact that the gambling software developer has been looking for new growth opportunities is not surprising to anyone. The company has already had its eyes focused on the Italian market, with its presence in the country being boosted by the recent acquisition of Snaitech.
- Author
Olivia Cole
