Gambling technology company Playtech (PTEC.L) is set to enter the forex trading market after agreeing a deal to buy a majority stake in TradeFX for 208 million euros ($224 million).
Playtech provides software used in sports betting and online casino and poker games and counts Betfair BETF.L, William Hill (WMH.L) and Paddy Power PAP.I as its licensees.
TradeFX, a trading platform and payment services provider, is majority owned by a trust for the benefit of Israeli billionaire Teddy Sagi, Playtech's largest shareholder.
"We intend to offer TradeFX trading platform to all of Playtech's licensees and other gaming companies, given the fact that the trading platform is complementary to gaming companies' operations," Playtech's Chief Executive Mor Weizer told Reuters.
Playtech shares rose as much as 5 percent on Thursday morning, and were up 3.1 percent at 801p by 1022 GMT.
The deal is expected to generate both cost and revenue synergies and would help Playtech enhance its customer base and enter new markets as TradeFX operates in more than 100 countries.
The Isle of Man-based Playtech said it will buy a 91.1 percent fully-diluted stake in TradeFX, known for the brand markets.com, with an additional payment of up to 250 million euros based on future performance.
Markets.com provides foreign exchange and CFD (contract for difference) trading platforms, including the popular MetaTrader 4 platform.
The gambling industry is looking for ways to bolster growth through acquisitions in light of increasing taxes and regulations in some of its biggest markets.
Playtech is gaining the benefits of a partnership with British gambling company Ladbrokes LAD.L to distribute all of its Live Games, across all platforms including desktop and mobile.
It also launched its casino products via the online site of Mexican gaming operator Grupo Caliente last year.
"With sustainable earnings growth and potential for earnings-accretive M&A, Playtech remains the top pick," analysts at Exane BNP Paribas said.
Weizer said gaming remained the core business of Playtech.
Canaccord Genuity is the sole sponsor and a joint financial adviser for the deal while UBS Investment Bank is a joint financial adviser.
($1 = 0.9270 euros)
(Editing by Gopakumar Warrier and Elaine Hardcastle)