Playtech to sell its financial division Finalto for $210 million

Online gaming and financial trading giant Playtech today revealed that it entered into an agreement to sell its financial trading unit Finalto, formerly known as TradeTech, to a Consortium led by Barinboim Group and backed by Leumi Partners Limited and Menora Mivtachim Insurance Limited.

Playtech has to a cash offer of up to $210 million from the Consortium. The offer includes an initial $185 million, of which $15 million is deferred for up to two years from completion of the transaction, together with a further $25 million which depends on certain cash flow or other criteria being met by the business carried on by the Finalto group.

Mor Weizer, CEO of Playtech commented:

Mor Weizer, Playtech

Mor Weizer

Playtech has a stated strategy to simplify the Group and today’s announcement is the conclusion of a two year process in which Playtech has explored all routes to maximise value and certainty for shareholders from Finalto.

The sale also offers a good outcome for all stakeholders in the Finalto Business, providing certainty for colleagues, customers and trading counterparties. The Consortium has a deep understanding of the Finalto Business and the markets in which it operates and we wish our colleagues every future success.

Playtech finalto

In the official, announcement, Playtech shared its intentions to focus on its “technology-led offering as a pure play business in the B2B and B2C gambling markets” and unlock significant capital through the transaction.

Weizer added:

Looking forwards, Playtech will focus on its technology led offering in B2B and B2C gambling, driven by our online expertise and supported by a strong balance sheet. We have been building momentum in our business, as highlighted by our progress over the last twelve months in key markets such as the US, Latin America, and Europe.

At the end of 2020, Playtech held $139 million (€113 million) of cash connected to Finalto’s regulatory and operating requirements on the Group’s balance sheet. At the completion of the transaction, $109 million of that amount is expected to be transferred with Finalto. As a result, the Consortium will receive net cash proceeds of $61 million. In turn, the available cash for Playtech will increase by $200 million.

Due to the global pandemic, the trading environment of the completion of the deal remains uncertain. Playtech is to retain the proceeds until there is more clarity, and consequently reduce net debt in the interim. If Playtech receives the expected funds in Q4 2021, the company will return the capital to the shareholders.

Playtech first announced it was going to sell Finalto in response to recent rumours and speculation in August 2020.

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