Playtech gets two of four required regulatory clearances for Finalto sale
Online gaming and financial services firm Playtech (LON:PTEC) issued a Trading Update covering the first four months of 2022, which contained some interesting updates regarding two M&A processes – the sale of Playtech’s Financials division Finalto, and the potential sale of Playtech itself.
First, regarding Finalto, Playtech said that the $250 million sale of the institutional B2B services firm is still on schedule to close by the end of June (i.e. in Q2). Playtech reported that two of the four required regulatory clearances (Finalto is licensed in multiple jurisdictions) have now been received, and the company clearly expects the remaining two to come in within the next few weeks. Playtech agreed to sell Finalto to Hong Kong based Gopher Investments last September, and the deal was approved by Playtech shareholders in December.
Regarding the sale of Playtech itself, the company said there has been some “positive progress” in discussions with the TTB investor group regarding its potential offer for the company. However, there can be no certainty as to whether an offer for the company will be announced, or the terms on which any offer might be made.
Playtech also noted that it is off to a good start in 2022, with Adjusted EBITDA for the first three months of more than €100 million. This positive Q1 run rate has continued through April. Playtech shares reacted positively to the news, trading up by 6% to 546p in early Thursday trading on the London Stock Exchange. However the shares remain well below the 680p-per-share all-cash offer made last year for Playtech by Australia’s Aristocrat Leisure Ltd (ASX:ALL), which was rejected by Playtech shareholders.
The full text of the Trading Update issued today by Playtech reads as follows:
05 May 2022
Playtech plc
Excellent start to 2022 continues
Playtech plc (“Playtech”) is pleased to report on trading for the first four months of 2022 and also provide an update on the Company’s ongoing corporate activity.
Trading update
Since FY 2021 results were announced on 24 March 2022, Playtech has continued its excellent start to the current financial year with Adjusted EBITDA (unaudited) for the first three months of more than €100 million. This positive Q1 run rate has continued through April.
The very strong performance has been driven by both the B2B and B2C businesses. Snaitech has seen the same trends continue from H2 2021, with an excellent start to the year driven by its online business, retail recovery and favourable sports results. B2B performance has been driven by very strong momentum from the Americas, in particular Caliplay in Mexico, in addition to a strong performance across the wider B2B operations, including Live Casino. The Live Casino business has also signed several new licensees and launched several new games. In North America, Playtech has signed multiple new customers in the US and launched several new partnerships in Canada following the opening of the Ontario market.
The excellent start to the year gives the Board great confidence in the prospects for FY 2022. As would be expected, the Board remains cautious and focussed given that we are at an early stage in the year, combined with the uncertain macro backdrop due to the pandemic and the war in the Ukraine. The Board is also conscious there cannot be any certainty that the strength across the business so far will be repeated throughout the remainder of the year. That said, the Company’s performance to date and current trends in the business positions the Company very well and the Board would hope to be able to update the market further as we progress through the year.
Corporate activity
There has been some positive progress in discussions with the TTB investor group regarding its potential offer for the Company. However, there can be no certainty as to whether an offer for the Company will be announced, or the terms on which any offer might be made.
Although capital market conditions are currently challenging, Caliplay and Playtech continue to explore a possible transaction which would allow Caliplay to enter the U.S. market on an accelerated basis.
The disposal of Finalto remains on track to complete in Q2 2022 with two of the four required regulatory clearances having now been received.
Annual General Meeting
Playtech will hold its 2022 Annual General Meeting on Thursday 30 June 2022.