This week, the gambling software operator Playtech released a statement to respond to the recent speculation in the Israeli media about the possible disposal of Finalto, its financials division. The company confirmed that it is in exclusive discussions with a management consortium of Israeli companies over the possible sale of the unit, which was previously known as TradeTech.
The consortium that expressed interest in purchasing Playtech’s financial unit is backed by The Phoenix Insurance Company Limited, Barinboim Group, Menora Mivtachim Insurance Limited and Leumi Partners Limited. According to the gambling software company’s filing with the London Stock Exchange, the cash offer made by the consortium amounted to up to $200 million. Of this, $170 million will be payable on the deal’s completion. Furthermore, Playtech said that $110 million of the capital required to operate the Financial division is set to be transferred with Finalto’s assets upon any sale.
Finalto, previously operating as TradeTech, is the financial division formed by Playtech with the takeover of three business-to-consumer and business-to-business Forex market entities. In late 2016, CFH Group, a Forex liquidity provider, was acquired by the gambling software operator at the price of $120 million. Playtech further spent a further $150 million on the acquisition of Alpha Capital Markets. After their purchase, the two entities were combined with Markets.com, the Retail Forex brokerage arm of Playtech.
Gambling Software Developer Seeks to Dispose of Non-Core Assets
Playtech also reiterated its previously announced intentions to keep its strategic focus on reducing the business only to its key assets and dispose of its non-core assets.
Although the financial unit remained one of the gambling software operator’s most profitable divisions in 2020, bringing €87.3-million revenue in the first six months of 2020, it seems that Playtech does not consider Finalto an asset of particular importance for its business. The company has been evaluating options for the financial division and, for the time being, it still remains unknown whether any transaction will follow and if yes, on what terms and time it would be carried out. The gambling software developer shared it would make a further announcement if and when appropriate.
Previously, the company confirmed for Finance Magnates that it was in talks with several potential suitors for a possible sale of its financial unit but refused to share more information at that time. The last time rumours got confirmed followed the announcement that Playtech is expecting adjusted annual earnings before interest, taxes, depreciation and amortisation (EBITDA) of no less than €300 million for full-year 2020. The gambling software developer also unveiled its intentions to focus on simplifying its business and disposal of non-core assets.
The new strategy of the operator has already resulted in Playtechselling its casual and social gaming assets, including the $10-million sale of YoYo Games earlier this month.
- Author
Olivia Cole
