Playtech enters agreement to sell Finalto business to Gopher for $250M

Playtech has entered into an agreement for the sale of its financial trading division, Finalto, to Gopher Investments for an enterprise value of $250 million in cash, announced the gambling tech company on Wednesday. Completion is expected in H1 2022, assuming normal timetable for regulatory clearances.

According to a press statement, the disposal remains in line with Playtech’s strategy to simplify the group and unlocks “significant capital.” It marks the end of an extensive selling process, now allowing the company to focus on its technology offering as a pure-play business in the B2B and B2C gambling markets.

Moreover, as a result of the agreement, Playtech believes it will increase predictability and stability of cash flows for the remaining group. “We are very pleased to have successfully reached an agreement with Gopher regarding the sale of Finalto,” said Mor Weizer, CEO of Playtech. “We are pleased to recommend this transaction to our shareholders.”

The consideration comprises an all-cash offer, payable on completion of the transaction. As a class 1 transaction, the sale is conditional upon the approval of Playtech’s shareholders, as well as the approval of regulatory authorities.

Finalto has been classified as held for sale and reported in discontinued operations since 31 December 2020. The business generated an adjusted EBITDA loss of $0.6 million for the first half of the 2021 financial year.

The Finalto Business’ B2C offering, operating the brand Markets.com, is an online contracts for difference (CFD) broker where customers can trade shares, indices, currency and commodity CFDs on its trading platform.

The transaction will see a Class 1 Circular containing further details and a notice to convene a general meeting published “as soon as practicable” for shareholders’ consideration. It has been unanimously supported by the Playtech board, which saw the deal as being “in the best interest” of shareholders.

Playtech announced back on May 26 that following an extended sale process it had entered into a transaction with a consortium led by Barinboim Group. A few months later, on July 2, the company received a conditional offer from Gopher to acquire the Finalto business for $250 million.

As the resolution for the transaction with the Barinboim-led consortium was not passed at a meeting on August 18, the consortium agreed with Playtech to terminate the SPA, which allowed the tech company to immediately engage with Gopher to progress on a potential Finalto sale. Negotiations have now resulted in the agreement announced last Wednesday.

“The board has, throughout the sale process, carefully evaluated all proposals which it has received,” stated the company. Prices proposed by the potential purchasers were taken into account, as well as the basis on which said prices had been reached and the potential purchasers’ knowledge and understanding of the business.

Playtech says it was particularly careful in evaluating understanding of the business in light of its regulated status in multiple global jurisdictions, as well as the potential to provide a “clean break” for the company. The Gopher agreement is unanimously seen by the board as satisfying and thus recommends shareholders to vote in favor of the transaction.

Gopher Investments is a 4.97% shareholder in Playtech and an affiliated entity of TT Bond Partners. The purchaser will be supported from a management perspective by members of the Finalto Business’ management team who will transfer with the Finalto Business.