British firm Playtech has agreed to a deal with Italy’s largest gaming companyand increase its presence in regulated markets.
Under the terms of the deal announced on April 12, Playtech will purchase 70.6 percent of Snaitech in 2 phases. Playtech will pay $ 358 million in the first instance to secure a majority stake in the betting shop and software supplier.
Offsetting Recent Losses
It’s expected this part of the deal will be completed by 2018’s close, at which point betting provider, casino, and the poker will be asked to make a takeover offer that was mandatory. Playtech will assume management of Snaitech in 2019, at which point it will take on the current debt of the company as well if all goes according to plan.
When all the moving parts come to rest, the total price to Playtech will be $1.05 billion. For the investment, the gaming business will derive all of its annual revenue from regulated gaming markets that are online.
The transfer to up its regulatory compliance comes at a time when government agencies around the world are cracking down on unlicensed operators. At the start of 2018, its B2B revenue drop was seen by Playtech sharply.
With Asian governments it’s had a trickle-down effect. Playtech has felt the sting of this downturn, as it supplies software and services to many of the biggest players of the area.
Hope Italian Market
In a February financial report,reported an 11 percent year-over-year fall in earnings for the first 51 days of 2018. As well as problems in Asia, the UK Gambling Commission’s (UKGC) impending action against fixed-odds betting terminals (FOBTs) is also likely to impact the corporation’s revenue.
“By geography, we believe its UK revenues will continue to come under pressure as its licensees unite and develop more tech in-house,” an analyst at Numis Securities informed Proactive Investors on February 22.
To counteract any additional downswings, Playtech will be looking towards its interest. Having a presence online and live, courtesy of 1,600 betting shops, Snaitech generated earnings of $1.09 billion in 2017.
For Playtech Snaitech’s regulatory safety is as important as its money-making capabilities. With all the necessary licenses in place from AAMS (Amministrazione Autonoma dei Monopoli di Stato), Playtech can be confident that its new venture will provide a steady income over the next several years.