Playtech goes for Social Gaming Market

 

Playtech, the world’s biggest online gaming software provider,  has announced a string of acquisitions as it reaches  into the social gaming market.

The Estonia-based firm said on Tuesday that it planned to spend 95 million euros ($124.1 million) buying assets owned by Israeli billionaire Teddy Sagi who founded Playtech and still owns a 48 percent stake still in Playtech.

 

“Ninety five million euros is a significant investment, especially in an area that is relatively unproven – there is no mention of the current profitability of the assets being acquired in this morning’s announcement,” said on London business analyst.

Playtech said it had signed a memorandum of understanding to buy assets including social gaming products where people playing interactive games online can buy virtual currency, such as Facebook credits, to use as part of the game.

It also plans to buy what it called “play for real” products such as casino and mobile poker software for selling to online gaming firms and a 20 percent stake in a social gaming operation targeted directly at consumers.

Playtech said in a statement that the consumer-facing part of the deal would create an additional earnings stream in one of the fastest growing segments of the gaming industry.

Mr Sagi, whose wealth is estimated by Forbes to be around $1.2 billion, has also provisionally agreed to become a company advisor. Given the potential conflicts involved in buying assets from a major shareholder, Playtech said other shareholders would get to vote on the proposed deal.

Playtech also said it planned to buy or rent a new office worth 10.5 million pounds and announced plans to accelerate payments for PT Turnkey Services (PTTS), a company which was also partially owned by Sagi before Playtech acquired it.

Playtech will get a 4.2 million euro discount on the PTTS deal price in return for the early payment. It described the unit’s performance since acquisition as very strong and said the first quarter of 2012 had been outstanding.

The company, which operates a joint venture with Britain’s biggest bookmaker William Hill, said in January the opening up of online gambling markets and relaxation of gambling laws across the world would present opportunities for global expansion.