Playtech to buy trading platform TradeFX for $224 mln

Reuters News
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Posted: Apr 02, 2015 3:42 AM

(Reuters) - Gambling technology company Playtech Plc <PTEC.L> said it would buy a majority stake in TradeFX Ltd for 208 million euros ($224.4 million) in cash to enter the trading platform and payment services market.

Playtech will buy a 91.1 percent fully-diluted stake in TradeFX with an earn out payment of up to 250 million euros based on future performance.

Consolidation activity in the gambling industry has gathered steam as increases in taxes and regulations in some of the biggest markets is hurting companies.

TradeFX is majority owned by a trust for the benefit of Israeli billionaire Teddy Sagi, Playtech's largest shareholder with a stake of about 33.6 percent.

"Teddy Sagi has proved to be a good source of deal flow which have contributed strongly to Playtech's success for the benefit of all shareholders," analysts at Cenkos Securities wrote in a note.

The deal is expected to close in May and would immediately add to its earnings, Playtech said on Thursday.

Canaccord Genuity is the sole sponsor and a joint financial adviser for the deal while UBS Investment Bank is a joint financial adviser.

Shares in the company were up 4.3 percent at 809.5 pence at 4.27 a.m. ET on the London Stock Exchange.

($1 = 0.9270 euros)

(Reporting by Aastha Agnihotri in Bengaluru; Editing by Gopakumar Warrier and Anupama Dwivedi)