Playtech makes Italian market move with €846 Snaitech acquisition

Playtech makes Italian market move with €846 Snaitech acquisition

Thursday, April 12, 2018 Posted by Luke Massey
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The initial deal will see Playtech acquire 70.6% of Snaitech

Playtech has reached an agreement for a 70.6% shareholding in Snaitech after taking the “compelling opportunity” to enhance its revenue mix towards regulated markets, diversify the geographical spread of these revenues, and gain exposure to the biggest gambling market in Europe.

Following completion of this major acquisition, expected to occur in Q3 2018, Playtech will launch a mandatory takeover offer for the remaining 29.4% shares, with the overall transaction anticipated to complete by Q4 2018.

Listed on the Italian stock market, Snaitech has the most extensive distribution network via franchisees (+1,600 betting points) and over 270,000 active players online. In 2017, the company generated revenue and EBITDA of €890 million and €136 million respectively. The total purchase enterprise value is €846 million with implied EV/EBITDA (pre-synergies) of 6.2x.

Hosting a presentation for analysts and investors, Playtech CEO Mor Weizer said: “Italy is the biggest market by GGR in Europe with over €20 billion (FY 2017), larger than the UK.

“However, the online market is still unsophisticated and under developed, with online penetration still only 7% compared with 41% in the more mature UK market.

“The Italian market is still very fragmented; the top five online operators in Italy currently have a market share of 56%, compared to 87% for the top five in the UK.

“The combination of low online penetration, market fragmentation, lack of sophistication and most importantly the fact that Snaitech is the number one sports brand, represents a significant opportunity for the combination of Playtech and Snaitech to capture market share.

Totally Gaming says: Weizer said that the “numbers speak for themselves” on this financially attractive acquisition, expected to deliver more than a 40% increase in EBITDA and double-digit EPS accretion. It will be funded by a combination of existing cash resources and new debt facilities delivering a significant improvement in the Group's balance sheet efficiency.

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