Playtech breakup looks worth a flutter

2 minute read

The spinning wheel on a roulette table is seen at Japan Casino School in Tokyo, Japan August 4, 2018. Picture taken August 4, 2018.

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LONDON, Feb 3 (Reuters Breakingviews) - Playtech’s (PTEC.L) hopes for a sale keep turning into busted flushes. The gambling technology firm’s investors on Wednesday rejected an offer from Aristocrat Leisure (ALL.AX), valuing it at 3.2 billion euros including debt. A mooted bid from former racer Eddie Jordan has also fallen apart read more . Happily, the group may be able to unlock value by splitting its Italian bookie operations from its technology division, which serves operators like Switzerland’s Casinò Lugano.

Analysts polled by Refinitiv expect Playtech to have boosted sales by 11% in 2021. Assume both units grew at an equal clip, and the Italian unit could have generated 142 million euros of EBITDA. Put that on the 7.7 times EBITDA that CVC paid for rival Sisal, and it could net 1.1 billion euros. To rival Aristocrat’s offer, the remaining software division would need to be worth 2.1 billion euros. That’s equivalent to a 15 times multiple, assuming EBITDA of 140 million euros.

It looks doable. Gambling outfits La Francaise des Jeux (FDJ.PA) and Tabcorp (TAH.AX) both trade at around 12 times EBITDA, per Refinitiv, while Sweden’s Evolution (EVOG.ST) is valued at 30 times. Playtech said on Thursday that another buyer, TTB Partners, may swoop. Either way, investors are still holding a good hand. (By Oliver Taslic)

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(The author is a Reuters Breakingviews columnist. The opinions expressed are their own.)

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Editing by Neil Unmack and Sharon Lam

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