Proposed Acquisition of Snaitech S. p. A by Playtech plc for 846m Funded by Cash and New Debt
Proposed Acquisition of Snaitech S.p.A by Playtech plc for €846m Funded by Cash and New Debt
The Board of Directors of PlayTech Plc ("PlayTech" or the "Company") is pleased to announce that PlayTech has reached an agreement with certain shareholders of Snaitech S. P. A. ("Snaitech") for PlayTech to acquire approximately 70. 6% of the total issued shares of Snaitech (the "Initial Acquisition").
If the Acquisition is completed, PlayTech will launch a tender offer for all of Snaitech's remaining shares (the "Tender Offer" and, together with the Acquisition, the "Transaction"). Completion of the Initial Acquisition is subject to certain regulatory and shareholder approvals and is expected to occur in the third quarter of 2018, with the entire transaction expected to close in the third quarter of 2018.
Strategic Highlights
- Creating a leading vertically integrated Italian retail and online gaming business that manages its own technology across all products and verticals, from land-based to online.
- In line with Playtech's strategy of investing in profitable businesses with strong management teams, similar DNA and attractive financial returns.
- Playtech's revenue mix will be significantly strengthened towards regulated markets, with 78% of group revenue coming from regulated markets after the expansion.
- Establish a strong presence in Italy, Europe's largest growing gaming market.
- This will build on PlayTech's historic success in developing the online market through a structured transaction.
- Combining two market-leading players in the B2B/B2C space, with a branded and scalable service offering, provides Playtech with further organic growth potential and strategic options.
- And
- Snytech's key strengths and competitive advantages are:
- Market-leading position in retail betting, the most extensive gaming machine network and a strong online position in Italy.
- Clear competitive advantages supported by a strong brand and an extensive distribution network of franchisees.
- Proprietary technology that complements the Playtech technology platform.
An experienced management team with a successful track record in operations and finances that will remain with PlayTech after the acquisition.
- Financial Highlights
- In 2017, Snytec generated sales of EUR 890 million and EBITDA of EUR 136 million.
- Market operating capitalization is EUR 846 million[1] with an implied EV/EBITDA (before consolidation) of 6. 2x.
- Expected annual cost and revenue synergies of EUR 10 million.
- Funded with a combination of existing cash resources and new debt facilities.
- Increase net debt leverage to below 1. 5x 2017 EBITDA[2].
Significant improvement in EBITDA[3] and double-digit EPS growth.
1. Based on an implied 100% value of Snitec’s issued and outstanding common shares totaling EUR 413 million, including net debt of EUR 429 million, pension liabilities of EUR 7 million and associated company investments of EUR 2. 2. Excluding Playtech convertible bonds
3. Pro forma 2017
Mo Weiser, CEO of Playtech, said about the acquisition:
"The acquisition of Snaitech marks the continuation of our strategy of investing in leading retail brands in fast-growing regulated markets. The acquisition meets the Board's strategic objective of improving the quality and diversity of the Group's earnings while leveraging the strength of Playtech's balance sheet and providing exposure to high-growth markets.
Playtech has always been at the forefront of its industry and this acquisition provides an opportunity to create a vertically integrated B2B2C operator in Europe's largest gaming market, creating significant value for shareholders."
Commenting on the transaction, Fabio Schiavolin, CEO of Snaitech, said:
"This acquisition marks the continuation of Snaitech's investment in one of Italy's most recognized top brands. This acquisition reflects our strong relationship with Italy and delivers significant value to our shareholders. Combining Playtech's Italian technology and expertise with Snytec's strong brand will enable us to capitalize on the online opportunities in the fast-growing and dynamic Italian market. We are delighted to be part of the Playtech family and look to the future with confidence and enthusiasm.
Presentation, Webcast and Conference Call
Playtech CEO Mo Weiser and Playtech CFO Andrew Smith will be presenting to analysts and investors at 9am today at UBS offices, 5 Broadgate, London, EC2M 2QS.
The presentation will be streamed live and on-demand on the following websites:
This presentation can also be accessed via live video conference:
Dial-in number (UK): 020-3936-2999
Dial-in number (rest of the world): +44-20-3936-2999
Conference ID: 562011
Replay (available for one week)
Dial-in number (UK): 020-3936-3001
Dial-in number (USA): +1-845-709-8569
Dial-in number (other areas): +44-20-3936-3001
Callback Conference ID: 617171
Live video webcasts can also be viewed on the Play Tech Website after the call.
Please contact us for details:
PlayTech PLC +44 (0) 16-2464-5954
Mo Waizer, CEO (CEO)
Andrew Smith, Supreme Finance Officer
James Newman, director of Investor Relations
UBS Limited (PlayTech's financial advisor, sponsor, corporate broker) +44 (0) 20-7567-8000
Good Body Stock Brokers (Corporate Broker to Play Tech) +44 (0) 20-3841-6220
Headland (PR consultant to PlayTech) +44 (0) 20-3805-4822
Morrow Sodali S. P. A. (Global Information Agent)
Contact Snaitech shareholders regarding the proposed forced acquisition proposal: Opa. Snaitech@Morrowsodali.
Domestic (toll-free): 800-198-926
International phone +39-06-4521-2832
Overview of Snaitech
Snaitech is a to p-class operator in the Italian gaming and betting market in Italy's gaming and betting markets in Italy's gaming industrial regulatory agencies, Agenzie Delle Dogane E-Dei Monopoli (ADM). Snaitech offers a wide range of gaming and betting products, including gaming machines, sports, horse racing, virtual events, electronic sports betting, skill games, and casino games. Snaitech is completely regulated in the market.
In particular, Snaitech has more than 1. 600 betting outlets and about 54. 000 units AWP and 10. In the fiscal year ending on December 31, 2017, Snaitec was a total sales of 890 million euros, EBITDA16590. Hands of € 10, ta x-traded profit of € 1. 6 million, net income of € 27 million. As of December 31, 2017, Snaitech has recorded a total asset 934. 7 million euros. As of the end of December 2017, Snaitech has employed a total of 848 employees in all business activities.
Overview of Play Tech
Founded in 1999, Premium Listed on the main market of the London Stock Exchange is a market leader in the game and financial trading industry.
PlayTech is online, retail, mobil e-based providers, lan d-based casino groups, governmen t-based businesses such as lottery, and many new entry companies starting business in the new regulation market, and the gaming industry software and services It is a major provider that provides. Business intelligenc e-based gambling software includes casinos, live casinos, bingo, poker, and sports betting.
Omn i-channel gambling pioneers, using a single account and wallet for operators and customers through PlayTech One, all products, all channels (web, mobile, retail), all devices, are seamless anytime, anywhere. We provide experiences. Provides marketing expertise, sophisticated CRM solutions, and other services for operators seeking complete turn key solutions. The Financial Section of PlayTech is called the Trade Tech Group, and is developing both B2C and B2B.
Play Tech has about 5. 000 employees in 17 countries.
Strategic and financial basis for this transaction
The suggested Snaitech acquisition is in line with PlayTech:
- By utilizing powerful balance sheets, we will further diversify regional revenue, and increase the quality of revenue, including regulatory revenue, to increase organic growth;
- EBITDA growth will be organically enhanced in the gaming market as a leader and EBITDA growth will be accelerated through the acquisition of excellent businesses in regulated areas and hig h-growth industries.
- Invest in brands and businesses that can withstand future industries and consumer customs. and
- Providing sufficient free cash flow to continue the powerful shareholder return track record.
This trading is a unique and exciting opportunity for Play Tech, and the PlayTech shareholders have many benefits:
- The integration of the two companies leading the market in the complementary industry will create a vertical integrated Italian company that manages all products and departments from retail to online.
- By utilizing the experience of Play Tech in the B2B market in Italy, the combination of specialized knowledge with Snaitech's similar DNA will expand market share in the area and utilize the potential of aggressive growth.
- Realizing hardware cost savings of approximately €10 million per year, further distributing PlayTech products through Snaitech's network and achieving further revenue synergies by optimizing online services through PlayTech's product, operational and marketing expertise.
- Strong overall financial performance, including a significant improvement in EBITDA and double-digit EPS growth in the first full year of consolidation, as well as a continued strong cash flow and shareholder return profile for the enlarged group.
- Further diversification of Playtech's revenue mix, with 78% of the enlarged group's pro forma revenue coming from regulated markets and 75% from the UK and Europe.
- The combination of two market-leading, branded and scalable players in the B2B/B2C space provides Playtech with organic growth potential and expanded strategic options.
- And
Leveraging the extensive knowledge and experience of both management teams to grow and develop the enlarged team.
Snaitech Management Team
Snaitech's management team includes individuals with extensive experience in the Italian gaming and betting industry. CEO Fabio Schiavolin was one of the co-founders of the Cogemat Group, which grew from a small operator into an established player in the Italian gaming market. Following Snaitech's acquisition of Cogemat in 2015, experienced senior management from the Cogemat team was integrated into Snaitech's management team, strengthening Snaitech's management team.
The transaction will enable PlayTech and Snaitech to further develop and grow in their respective markets by leveraging the extensive knowledge and experience of both management teams. In addition, both management teams have a track record of successfully integrating new businesses following acquisitions.
PlayTech has confirmed that key members of Snaitech's senior management team, including Fabio Schiavolin, will remain in their roles as part of the transaction, with Mr. Schiavolin continuing to serve as CEO of Snaitech. No new directors are expected to be proposed to the Playtech board as a result of the transaction.
Key Elements of the Transaction
Original
For this acquisition, the indirect subsidiary of our company, PLUTO (ITALIA) S. P. A (hereinafter referred to as "buyers"), and the Global Games S. P. A and OI Games S. A. Then, a stock sales contract (hereinafter "SPA") was concluded.
In order to complete the acquisition, (i) PlayTech's trading approval, (II), and (II) must be required by the relevant ant i-Trust authorities, and (II) III) Agreement on the transaction of ADM, an Italian gaming regulation authorities, is a condition. If these conditions are not satisfied with August 9, 2018 (this date can be extended by 30 days at the request of the buyer or World Games S. P. A.), the contract between the buyer and the seller will end.
The SPA also provides the advantage of withdrawal to PlayTech in the event that Snaitech has a serious adverse effect (due to contract definitions) before the first acquisition is completed.
Forced acquisition offer
If the first acquisition is completed, the buyer will own 70. 561%of Snaitech's voting rights, and will have to submit a forced acquisition proposal. PlayTech plans to notify the Consob immediately after the first acquisition is completed and publish a duty of forced acquisition proposal.
The forced acquisition proposal must be made at a price per share that does not fall below the highest price paid by the buyer (or who acts in cooperation with the buyer) in the 12 months before the CONSOB notification. 。 Therefore, the buyer will make a forced acquisition proposal for the first acquisition price of 2. 19 euros per share.
The forced acquisition proposal is to abolish the listing of Snaitech. If the listing is not realized as a result of the forced acquisition proposal, the listing abolition may be realized by the merger of Snetech and the buyers.
Transaction price
- The valuation paid for 100%of Snaitech's issued shares is as follows: < SPAN> For the acquisition of this, our indirect subsidiary Pluto (Italia) S. P. A (hereinafter "buyer" ), The company's stock sales contract (hereinafter referred to as "SPA") has been concluded between the Global Games S. P. A and OI Games S. A., a company that guarantees the debt of the buyer.
- In order to complete the acquisition, (i) PlayTech's trading approval, (II), and (II) must be required by the relevant ant i-Trust authorities, and (II) III) Agreement on the transaction of ADM, an Italian gaming regulation authorities, is a condition. If these conditions are not satisfied with August 9, 2018 (this date can be extended by 30 days at the request of the buyer or World Games S. P. A.), the contract between the buyer and the seller will end.
- The SPA also provides the advantage of withdrawal to PlayTech in the event that Snaitech has a serious adverse effect (due to contract definitions) before the first acquisition is completed.
- Forced acquisition offer
- If the first acquisition is completed, the buyer will own 70. 561%of Snaitech's voting rights, and will have to submit a forced acquisition proposal. PlayTech plans to notify the Consob immediately after the first acquisition is completed and publish a duty of forced acquisition proposal.
The forced acquisition proposal must be made at a price per share that does not fall below the highest price paid by the buyer (or who acts in cooperation with the buyer) in the 12 months before the CONSOB notification. 。 Therefore, the buyer will make a forced acquisition proposal for the first acquisition price of 2. 19 euros per share.
The forced acquisition proposal is to abolish the listing of Snaitech. If the listing is not realized as a result of the forced acquisition proposal, the listing abolition may be realized by the merger of Snetech and the buyers.
Transaction price
The valuation paid for 100%of Snaitech's issued shares is as follows: for this acquisition, PLUTO (Italia) S. P. A (hereinafter "buyer"), our indirect subsidiary. A stock sales contract (hereinafter "SPA") has been concluded between Global Games S. P. P. A and OI Games S. A.
In order to complete the acquisition, (i) PlayTech's trading approval, (II), and (II) must be required by the relevant ant i-Trust authorities, and (II) III) Agreement on the transaction of ADM, an Italian gaming regulation authorities, is a condition. If these conditions are not satisfied with August 9, 2018 (this date can be extended by 30 days at the request of the buyer or World Games S. P. A.), the contract between the buyer and the seller will end.
The SPA also provides the advantage of withdrawal to PlayTech in the event that Snaitech has a serious adverse effect (due to contract definitions) before the first acquisition is completed.
Forced acquisition offer
If the first acquisition is completed, the buyer will own 70. 561%of Snaitech's voting rights, and will have to submit a forced acquisition proposal. PlayTech plans to notify the Consob immediately after the first acquisition is completed and publish a duty of forced acquisition proposal.
The forced acquisition proposal must be made at a price per share that does not fall below the highest price paid by the buyer (or who acts in cooperation with the buyer) in the 12 months before the CONSOB notification. 。 Therefore, the buyer will make a forced acquisition proposal for the first acquisition price of 2. 19 euros per share.
The forced acquisition proposal aims to abolish the listing of Snaitech. If the listing is not realized as a result of the forced acquisition proposal, the listing abolition may be realized by the merger of Snetech and the buyers.
Transaction price
The valuation paid for 100%issued shares of Snaitech is as follows:
A premium of approximately 17. 0% based on Snaitech's share price of €1. 87 (the closing price on the last business day prior to this announcement).
A premium of approximately 27. 0% based on Snaitech's three-month average trading volume price.
Snaitech's total provisional ordinary share capital is approximately €413 million.
Snaitech's total enterprise value is €846 million[4].
Historic 2017 EV/EBITDA takeover multiple of 6. 2x[5].
Transaction Financing
PlayTech will fund the Transaction, including the potential refinancing of Snaitech's existing debt, through a combination of equity capital and approximately €1 billion in new debt financing (the "Transaction Financing").
The transaction is expected to raise the enlarged group's net debt leverage to more than 1. 5x 2017 EBITDA (excluding Playtech convertible bonds), leaving a strong cash flow profile to repay debt in the medium term.
PlayTech may therefore also seek a corresponding credit rating to ensure a sustainable long-term capital structure for the enlarged group, by combining the strong free cash flow profiles of both businesses.
PlayTech Dividend Policy
4. Based on net debt of €429 million, pension liabilities of €7 million and partner investments of €2 million.
5. Based on Snytec's 2017 EBITDA of €135. 9 million
As a result of the PlayTech transaction, PlayTech expects no change to the progressive dividend policy adopted in 2016.
PlayTech's current transaction
PlayTech's current transaction is in line with the update provided in its full-year results announcement on 22 February 2018, with management remaining confident of good growth in 2018 with improving revenue quality.
Snaitech's current transaction
Snaitech's current transaction is in line with the update provided in its full-year results announcement on 16 March 2018.
Expected timing of the transaction
The parties currently expect, subject to necessary approvals, that the initial acquisition will close by Q3 2018 and that the mandatory tender offer will close by Q3 2018.
Recommendations and Approvals
Cash of subsidiaries on acquisition The Company is currently assessing the impact of these new accounting standards and amendments. New York Annual Conference at the New York Marriott Marquis Hotel on April 29, in New York City. (Photo Credit: Noa Grayevsky/Getty). Playtech continued to expand its presence in Latin. America with new structured agreements signed in. Guatemala (Tenlot), Costa Rica (Red.
accepted