Well it looks like online gaming tech provider Playtech (LON:PTEC) is going to get its wish after all, and exit the Forex business.

After FNG reported exclusively back in August that Playtech had engaged investment bankers (UBS) to sell what it calls its Financials division – consisting mainly of the Finalto (formerly CFH Group and Alpha Capital Markets) multi-asset B2B business and the Markets.com Retail FX brokerage arm – and then another exclusive FNG report in January that Playtech had identified a buyer for Finalto with a deal being negotiated in the $200 million range, the company announced this morning that an agreement had been finalized which will see Finalto / Markets.com offloaded for total expected consideration of $210 million.

However, Playtech has agreed to include $109 million of cash in the deal – more than half of the total “official” sale price – which will be left with the Finalto business, such that the net consideration being paid by the buyer group is really just $101 million. Playtech took an impairment charge of €221 million in the second half of 2020, writing down the value of Finalto / Markets.com in is books to reflect the expected sale value.

Playtech said that it has entered into an agreement for the sale of its financial trading division to a consortium led by Israeli entrepreneur Zvika Barenboim’s Barenboim Group with backing from Leumi Partners Limited and Menora Mivtachim Insurance, together with key members of the Finalto management team.

The cash offer from the consortium is up to USD $210 million, comprising an initial $185 million of which $15 million is deferred for up to two years from completion of the transaction, together with a further $25 million contingent on certain cash flow or other criteria being met by the business carried on by the Finalto group. However as noted above $109 million is going the other way, to be included with the Finalto balance sheet.

The transaction is expected to complete in Q4 2021, assuming regulatory approvals for the deal are received.

The $210 million sale price represents an enterprise value to EBITDA multiple of 24x FY2019 Adjusted EBITDA and 6x FY2018 Adjusted EBITDA, being the last full years prior to 2020 which was impacted by the one-off COVID-19 benefit in Q1 2020 – the FY2020 EV-to-EBITDA multiple is just 3x, given the “one-off COVID benefit” from March 2020’s insane trading levels. It also computes to 23x trailing twelve month EV-to EBITDA (to April 30, 2021).

As at 31 December 2020, Playtech held $139 million (€113 million) of cash relating to Finalto’s regulatory and operating requirements. Further to transaction negotiations with the consortium, at completion an amount of $109 million is expected to be transferred with Finalto. The disposal will therefore result in net cash proceeds received by Playtech at completion from the consortium of $61 million (being $170 million upfront cash, less $109 million).

Playtech said that the transaction was agreed on the basis of a “locked box” closing mechanism, whereby the economic risks/benefits associated with the Finalto business transfer to the purchaser from 31 December 2020 onwards. The transaction is still subject to Playtech shareholder approval, however it was unanimously supported by the Playtech Board as being in the best interests of shareholders as a whole.

Mor Weizer, CEO of Playtech commented on the sale:

“Playtech has a stated strategy to simplify the Group and today’s announcement is the conclusion of a two year process in which Playtech has explored all routes to maximise value and certainty for shareholders from Finalto.

“The sale also offers a good outcome for all stakeholders in the Finalto Business, providing certainty for colleagues, customers and trading counterparties. The Consortium has a deep understanding of the Finalto Business and the markets in which it operates and we wish our colleagues every future success.

“Looking forwards, Playtech will focus on its technology led offering in B2B and B2C gambling, driven by our online expertise and supported by a strong balance sheet. We have been building momentum in our business, as highlighted by our progress over the last twelve months in key markets such as the US, Latin America, and Europe. The agreements we have signed with new customers in this period further demonstrate our capability as a leading technology provider and show the type of opportunities we intend to convert in the future.”