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Tuesday , 22 January 2019
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Playtech completes Italian Deal With Snaitech

Playtech, the British gambling technology company has recently agreed a deal which sees them gain a majority stake in Snaitech; the Milan headquartered, Italian heavyweight in the betting and gaming market. The deal has taken place with a view to a full takeover on the horizon; as once the deal is completed Playtech are obliged to make a takeover offer for the remaining shares.

This deal is worth $1bn and is to be funded by a combination of cash and new debt and it will see FTSE 250 listed Playtech acquire 70% of the Snaitech shares; in their bid to increase their revenue from regulated markets.

Playtech Share Price

On the announcement of the deal Playtech, the company who provide software to many of the biggest gambling companies in the world, shares shot up by 6%. Snaitech, who is also involved in television services and racetrack management saw revenues of 890m euros in 2017; with core earnings of 136m euros.

It is expected that Playtech will gain approval from shareholders and the necessary regulatory bodies by the third quarter of the year; which would see the deal finalised and the transaction complete in the fourth quarter. 

2017 was a little shaky for Playtech and didn’t experience the same levels of growth they were expecting; as a result of 2016 performance. In late 2017 the share price dropped rapidly; after they announced that their full-year performance would be around 5% lower than even the bottom end of market expectations. The reasons for the performance levels of the company not been as high has been attributed in part to the large crackdown on gambling syndicates in one of Asia’s biggest markets Malaysia. 

Italian Aspirations

This deal comes for the firm with the backdrop of sweeping regulatory changes within the UK, where Playtech is based. Gambling authorities and lawmakers here have been trying to cut the stake limits on gambling machines; which could really affect the profits of companies such as Playtech. This proposed deal with Snaitech will allow Playtech to establish themselves in Europe’s largest gambling market, Italy.

Playtech chief executive Mor Weizer had this to say on the takeover “The acquisition of Snaitech represents the continuation of our strategy to invest in leading retail brands in fast-growing, regulated markets”. Weizer also commented that this purchase will diversify the revenue of the group and deliver exposure to the huge Italian market;  which is seen as being relatively undeveloped on an online basis.

Playtech has also claimed since the news of the takeover broke; that it will create the first virtually integrated retail and online gaming business in Italy.

Great Opportunity

The chief executive of Snaitech also made a statement which said: “This acquisition reflects Snaitech’s position as one of the leading and best-known brands in Italy and delivers meaningful value to our shareholders”. He also commented on how Playtech have always been at the forefront of their industry; and this takeover is providing the opportunity to create a virtually integrated B2B2C operator. This is expected to deliver significant value to shareholders of both parties when operating in the Italian market

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