| Real
Casinos> 2009
- Real Casinos News Archive> Online gaming software licence agreement with William
Hill PLC
Acquisition of businesses and assets from affiliates and other
third parties and immediate sale of majority of these businesses
and assets to William Hill
Highlights:
William Hill software licence agreement
* Playtech is to supply William Hill Online with casino, poker
and other gaming software products (the "William Hill Online
Licence") on a phased basis commencing January 2009 and culminating
in an exclusive relationship for casino and poker from 1 January
2010. The William Hill Online Licence will run for a minimum of
five years
Acquisition of businesses and assets of affiliates and other third
parties
* Playtech is to acquire certain online gaming marketing assets,
businesses and contracts (the "Purchased Assets") from
affiliates and other third parties for a total consideration of
up to $250 million (c. £144.5m) in cash from existing resources
(the "Acquisition")
* For the six months to 30 June 2008, the Purchased Assets generated
combined revenues of $51.4m (c. £26.0m) and net earnings of
$10.4m (c. £5.3m). These net earnings are growing rapidly
and the current annualised net earnings run rate for the Purchased
Assets is c. $31.0m (c. £17.9m)
Immediate sale to William Hill
*
o Playtech will immediately sell the majority of the Purchased Assets
to William Hill in return for a 29 per cent. interest in William
Hill's enlarged online operation ("William Hill Online").
Playtech's interest in William Hill Online can increase to 32 per
cent. depending on certain conditions relating to the integration
* William Hill retains a right to buy out Playtech's interests in
William Hill Online after four and six years on an independent fair
value basis
* William Hill will continue to control and operate William Hill
Online
o William Hill's pro forma 2008 estimates for the enlarged William
Hill Online business announced today: net revenues of c. $328.7m
(£190.0m) and EBITA of c. $129.8m (£75.0m)
Financial effects for Playtech
* Playtech's Board believes this series of transactions, which
are expected to complete in full in January 2009, will be significantly
earnings enhancing from January 2009 when Playtech will receive:
o licence income under the terms of the William Hill Online Licence;
plus
o a 29 per cent. share of William Hill Online's profits, a significant
amount of which is expected to be distributed. This 29 per cent.
interest was determined on the basis of the contribution of the
Purchased Assets to William Hill's enlarged online operation and
reflecting a reduction in revenues currently generated by Playtech
from certain of the Purchased Assets
* Playtech's Board also believes there is the potential to make
a significant future capital gain if William Hill Online is successful
and if William Hill exercises its buy out rights in relation to
Playtech's interest
Mor Weizer, Chief Executive Office of Playtech, said:
"This series of transactions is very significant for Playtech.
We are delighted that Playtech is to provide software to a market
leader such as William Hill and believe that the licence agreement
confirms Playtech's status as the leading software provider to the
global online gaming marketplace. We are excited to be working with
a company that has the scale and breadth of William Hill.
Through these transactions William Hill's online gaming and sports
betting business will be well positioned for significant future
growth. Whilst William Hill will continue to manage and control
its online business, Playtech, through our minority interest, will
benefit financially from the future growth of the enlarged William
Hill online operation.
This is the first in a number of other potentially significant
earnings enhancing affiliate acquisition opportunities".
|
