Playtech, an online gaming and financial services company, has hired UBS Investment Bank to sell its financial unit TradeTech and is looking for an initial bid between $200 million to $250 million.
As reported by the Israeli news agency Calcalist today, several parties and groups are already showing interest in the acquisition. One of these groups willing to bid for the unit was formed in recent weeks by Fortissimo investment fund, Israeli entrepreneur Zvika Barenboim, and a few institutional bodies.
The report detailed that the group is directly negotiating with PlayTech’s management for the deal.
If the group strikes this deal with TradeTech, 40 percent of the company will be held by the institutions, while the rest 60 percent will be in control of Fortissimo and Barenboim.
Founded in 1999, PlayTech primarily offers the technology for various gambling and sports betting platforms. TradeTech is its financial division formed with the acquisition of the three institutional (B2B) and retail (B2C) forex market entities.
Playtech acquired CFH Group, a company offering liquidity services to FX brokers, in late 2016 for $120 million, and later spent another $150 million for Alpha Capital Markets, a London-based FX and CFDs market maker. These entities were then combined with Playtech’s Retail FX brokerage arm Markets.com.
The sale is happening at a time when TradeTech is seeing windfall profits largely due to the COVID-19 induced volatility and retail investors’ growing interest in the trading markets. For the first four months of this year, this arm of Playtech reported an EBITDA of over €45 million, compared to last year’s EBITDA of €7.8 million over revenue of €67.9 million.
Though Playtech’s share prices dropped sharply earlier this year, it pivoted aggressively since March and is currently trading at £3.72, losing 9 percent year-to-date. It has an overall market cap of £1.1 billion.