2nd Apr 2015 06:33
LONDON (Alliance News) - Playtech PLC Thursday said it will buy a 91.1% stake in online contract for difference and options broker TradeFX Ltd For up to EUR458 million, a deal that will push it into a new area and that it expects to boost earnings immediately.
The company also said it still has substantial resources with with to pursue further acquisitions.
In a statement, the gaming software development company, said it will pay EUR208 million in cash for the TradeFX stake initially and could then pay up to a further EUR250 million depending on the performance of the business, which also provides forex trading platforms.
"I am delighted to announce the proposed acquisition of TradeFX which provides entry into a highly complementary new market vertical where our combined operational superiority will enable exciting growth opportunities. In addition to being immediately and significantly earnings enhancing, the payment terms for the acquisition are weighted towards future financial performance of the business," said Playtech Chief Executive Mor Weizer.
"The acquisition adds weight to the strong momentum with which we have started the year and which has continued throughout the first quarter. Following the acquisition, Playtech will retain significant resources to continue to pursue further acquisition opportunities," he added.
TradeFX was founded in 2009 and now has 500 staff in offices in five countries. It has both business-to-business and business-to-consumer operations, the principle consumer being markets.com. It made earnings before interest, tax, depreciation and amortisation of USD34.9 million in 2014.
However, Playtech said the business is also at an inflection point with current annualised Ebitda running significantly above the 2014 level.
By Steve McGrath; [email protected]; @stevemcgrath1
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