Online gaming and financial trading systems giant Playtech PLC (LON:PTEC) just announced it has agreed to acquire technology, intellectual property and certain customer assets (together ‘the assets’) from ACM Group Limited (known in the industry as Alpha) as it continues to enhance its Financials Division’s B2B offering.
As a result of the acquisition of the assets a team from Alpha will join the TradeTech Group and the brand TradeTech Alpha will be created to deliver a bespoke risk management and trading solution to B2B customers.
The Company also announced that its Financials Division will, from now on, be known as TradeTech Group to better reflect the full capabilities of the businesses within the division and align its brand recognition throughout the industry.
Playtech’s strategy is to continue to further build its capabilities across the entire value chain in the financial trading sector. To better reflect the breadth of services offered across the Financials Division, the Division will from now on be known as TradeTech Group.
Furthering the breadth of TradeTech Group’s financial risk management, trading, and market making services is a central part of the strategy to grow its B2B financial offering. The acquisition of these key assets brings with it proprietary technology enabling TradeTech Group to offer an enhanced suite of products and services, which will now include market leading B2B risk management and bespoke trading solutions to the industry. Management believes that success for brokers in the financial trading industry is driven by the ability to acquire customers directly, monitor their performance and monetise their order flows through enhanced risk management. Following the completion of the acquisition, TradeTech Group will be positioned to offer a turnkey B2B solution to brokers covering the entire lifecycle of a trade, from front end technology to CRM and platform management, to liquidity technology, and risk management and professional trading services.
In addition to intellectual property and sophisticated proprietary technology, the Alpha dealing, risk and business development teams have a significant track record and reputation in the financial trading industry that brings a wealth of trading experience to TradeTech Group. As well as their institutional relationships, the Alpha teams will deepen TradeTech Group’s offering to professional and high net worth traders allowing it to launch a dedicated high-net worth professional brand called MarketsPro.
Consideration for the acquisition comprises:
- an initial up-front payment of $5 million;
- two staged payments based on 1 x EBITDA of 2017 and 2018; and
- contingent consideration based on 5.2 x the 2019 EBITDA, minus the initial payment and 2017 and 2018 payments, with the total consideration capped at $150 million
Completion of the acquisition, which is subject to the satisfaction of certain conditions, is expected to take place by 30 September 2017.
Following the acquisition, TradeTech Group will comprise:
- TradeTech Alpha, created to deliver a dedicated, industry leading, B2B solution delivering market made liquidity, professional bespoke trade execution, and risk services
- Markets.com, a brand operated by Safecap as a provider of CFD and FX trading platforms
- MarketsPro, a newly established dedicated B2C brand for high-net worth clients, following the acquisition of assets from Alpha Capital Markets
- CFH, which will continue to provide tier 1 FX liquidity services and multi-asset execution through its best of breed proprietary brokerage technology
Ron Hoffman, Chief Executive Officer of Playtech’s Financials Division, TradeTech Group, said:
This is a significant step in the evolution of TradeTech. The financial trading industry is driven by the core capabilities of platform technology, customer acquisition and retention, CRM management, and financial trading and risk management expertise. The acquisition of Alpha’s high-quality technology and teams of industry experts will significantly deepen our expertise in trading and risk management, allowing TradeTech Group to offer a full turnkey solution to B2B clients across the industry.
Muhammad Al-Amin Rasoul, Chief Executive Officer of Alpha, added:
This is a natural fit for Alpha. The strength of TradeTech Group’s management team and asset base will provide us with a platform to grow our offering with TradeTech Alpha. Not only does TradeTech offer everything that you need for a complete B2B solution for brokers, but you can get that solution from the most financially secure company in the industry. We could not be happier to join the family and start this next exciting chapter at TradeTech Group with the newly launched TradeTech Alpha brand.