Playtech Cyprus Ltd. (AIM:PTEC) controlling shareholder Teddy Sagi is not resting on his laurels and is continuing to expand the company through acquisitions. The online, mobile, TV, and land-based gaming software solutions developer today acquired the business and assets of Virtue Fusion (Alderney) Ltd., a developer and licensor of online bingo products for ₤29 million. Playtech financed the acquisition from its existing cash resources.
The price tag could increase by up to £7 million, payable in the first quarter of 2011, depending on Virtue Fusion's earnings before interest and taxes (EBIT) in 2010.
Playtech has no problem financing an acquisition of this size. It had $66 million in cash reserves at the end of June 2009, and its cash reserves have presumably subsequently increased from its positive cash flow from operations.
The acquisition of Virtue Fusion is Playtech's fifth acquisition in the past three and a half years, since the US market was closed to online gaming. The acquisition underscores the company's adherence to its M&A strategy, as opposed to exclusive reliance on in-house growth.
Playtech and Virtue Fusion have a history; two years ago, Playtech was in contact with the company, but no deal was struck at the time, and the acquisition talks were called off. Playtech CEO Mor Weizer said, "The acquisition places Playtech in the leading position in international online bingo markets, complementing our leading position in poker and casino and, following the Gaming Technology Solutions Ltd. (GTS) acquisition, as a content provider. It reflects our ongoing commitment to provide licensees with a comprehensive portfolio of best of breed gaming products."
Playtech's share rose 2.2% on London’s Alternative Investment Market (AIM) today to ₤4.78, giving a market cap of ₤1.03 billion.
Published by Globes [online], Israel business news - www.globes-online.com - on February 15, 2010
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