CEOs 'under pressure' to make acquisition deals

CEOs 'under pressure' to make acquisition deals

Wednesday, July 6, 2016 Posted by Totally Gaming
Playtech CEO Mor Weizer says CEO's are "constantly being asked when the next transaction is going to happen"

CEOs of gaming companies are under unfair pressure to find the next big acquisition, according to Playtech CEO Mor Weizer.

Speaking at the World GES conference in Spain today, Weizer said that the current market conditions, where consolidation is a big driver, could see some companies rush into deals for fear of missing out.

“There is some pressure on CEOs to do deals, which is not right,” he said. “It's typically CEOs of listed companies with money in the bank, but they are constantly being asked when the next transaction is going to happen and what firms they are looking at.”

He added that it was important for companies to be very, very clear on how a potential acquisition will add value to a business and that an execution plan is a vital part of any deal. He said that some deals are in danger of being made just to make a headline.

Weizer explained that while Playtech has made 28 acquisitions in 10 years, the company actually takes a conservative view when it comes to deals, suggesting that the company has looked at up to 50 business in the past year.

Weizer said that the recent trend in M&A in the industry was aided by a very accommodating environment in terms of valuations and market conditions and that the deals in the UK with Ladbrokes and Coral and between Paddy Power and Betfair will be replicated in other jurisdictions.

Earlier on in the day, Cameron Cartmell, partner at EY, said that the changing regulatory environment has been key driver of market consolidation and anticipated more deals will happen as markets continue to regulate and, just as importantly, tax gambling operators.

However he said that appetite for M&A in the UK likely to be low in next six months given the disruption and uncertainty caused by the Brexit vote. 

Totally Gaming Says: “The need to manage multi jurisdiction operating in an increasingly diverse regulatory environment means companies will look ever more closely at economies of scale to make it worthwhile. CEOs may be under a lot of pressure to make deals because the market moves so quickly that businesses can suddenly find themselves behind the curve if they don't plan adequately.”

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