Memorandum of Understanding

RNS Number : 4505B

Playtech Limited

17 April 2012

 



Playtech Limited

('Playtech' or the 'Company' or the 'Group')

Memorandum of Understanding

Playtech (AIM: PTEC), the international designer, developer and licensor of software and services provider for the online, mobile and land-based gaming industry, announces that in preparation for the move to a Premium Listing on the Main Market of the London Stock Exchange and its penetration efforts into social gaming, the Company signed a non-binding memorandum of understanding ("MoU") in relation to the Group's intention to acquire certain assets and businesses including those enabling the Group's entrance into the social gaming market.

Highlights

§ MoU signed regarding intention to acquire social B2B assets and businesses in addition to significant assets for real money B2B online and mobile gaming, and an equity stake in a related B2C venture

§ MoU signed regarding intention to acquire office space currently occupied by Gaming Technology Solutions ("GTS") in London, UK, ahead of the intended move to a Premium Listing on the Main Market of the London Stock Exchange ("Premium Listing")

§ MoU signed regarding the appointment of Teddy Sagi as an advisor to the Company ahead of the intended Premium Listing 

MoU regarding purchase of B2B real money gaming and B2B social assets and businesses, and equity stake in related B2C venture

Playtech has signed a non-binding memorandum of understanding regarding the potential acquisition of certain B2B real money gaming and B2B social media assets and businesses and a related equity participation in a B2C venture with entities in which Teddy Sagi is beneficially interested. Mr. Sagi is beneficially interested in Playtech's largest shareholder, Brickington Trading Limited.

This acquisition and related arrangements would constitute a related party transaction under the AIM Rules for Companies. Playtech's Board has concluded that such acquisition and related arrangements should be made subject to independent shareholder approval (as would be required for a company with a Premium Listing) whether or not completion occurs before or after the intended Premium Listing. Further details on the transaction will be provided in due course.

Playtech has been monitoring social gaming activity operated by various companies through social networks and mobile platforms and has been analysing a number of ways to penetrate the social gaming arena. By completing the intended transaction, Playtech would gain access to a broad range of social gaming platforms and products and believes it would be uniquely positioned as a leading B2B provider with the ability to supply cross platform capabilities for a full suite of products including social casino, poker, bingo and rummy.

These platforms and products are already successfully deployed in a fast growing B2C social gaming operation, in which Playtech will receive a 20% stake as a result of the transaction, thus creating an additional earnings stream for the Group in one of the fastest growing segments in the gaming industry.

The outline terms provide for the acquisition of the B2B elements of various businesses and assets that were acquired by entities in which Teddy Sagi is beneficially interested following the completion of the Group's acquisition of PT Turnkey Services Limited. These businesses include 'play for real' gaming assets and products, in addition to social gaming products with incorporation of real money purchase by end users of virtual currency, such as Facebook credits. The assets which are the subject of the intended acquisition include the following:

§ Social gaming:

§ Social gaming platform including backend capabilities

§ Social poker  

§ Social casino and casino content

§ Social Rummy

§ Social Bingo

§ Play for real:

§ End-to-end online casino software, integration platform and casino games content

§ Mobile poker software (both Native (iOS and Android) and HTML5)

§ Mobile casino software (both Native (iOS and Android) and HTML5)

§ Poker (real money) software

The consideration for the intended acquisition is expected to be EUR95 million, payable by the Group in one or more tranches at a time of the Group's choosing following completion. Any outstanding balance from an initial payment on completion will accrue interest at a competitive market rate.

The balance of 80% equity in the B2C assets and business incorporating play for real, lottery and social gaming activities, will be retained by entities in which Teddy Sagi is beneficially interested. These entities will be granted perpetual royalty free licences to use the software and other assets being acquired by the Group as part of the transaction, as well as a licence to use certain games within the Group's portfolio in each case in relation to play for fun activities.

MoU to acquire existing offices in London, UK

Playtech has signed a non-binding memorandum of understanding with Worldwide Online Enterprises Limited, detailing its intention for its UK subsidiary, GTS, to purchase a modern, recently completed property in London, currently occupied by GTS, for a consideration anticipated to be GBP10.5 million or alternatively lease the building on a long term basis for an annual fee of GBP750,000. The Company expects the transaction to be completed prior to the Company's intended Premium Listing.

The anticipated purchase price is considered attractive for a building of comparable location and quality and the purchase will enable this key business of the Group to successfully grow within the building.

The building is currently owned by a company in which Teddy Sagi is beneficially interested. Accordingly, if the transaction is completed prior to the intended Premium Listing, it will constitute a Related Party Transaction under the AIM Rules for Companies. Further details on the transaction will be provided in due course.

MoU regarding the appointment of Teddy Sagi as an advisor to the Company

Playtech has signed a non-binding memorandum of understanding with Teddy Sagi for the provision of advisory services to the Company for a nominal fee of EUR1 per annum. The Company expects the transaction to be completed prior the Company's intended Premium Listing.

If the transaction is completed, it will constitute a Related Party Transaction under the AIM Rules for Companies. Further details on the transaction will be provided in due course.

- Ends -

Further information

Playtech Ltd Mor Weizer, Chief Executive Officer David Mathewson, Chief Financial Officer c/o Pelham Bell Pottinger	[phone]
Canaccord Genuity Limited Piers Coombs / Bruce Garrow	[phone]
Pelham Bell Pottinger David Rydell / Olly Scott / Guy Scarborough	[phone]

About Playtech

Playtech develops unified software platforms and content for the online and land-based gaming industry, together with providing a range of ancillary services such as marketing, hosting and CRM services.

Leading gaming applications include casino, poker, bingo, sports betting, live gaming, casual and fixed odds games. Playtech provides licensees with the tools to maximise cross-selling opportunities, player loyalty and yield, all through the powerful management interface - the IMS. The Group's capabilities enable the delivery of an integrated software or turnkey solution, with players accessing online, broadcast, mobile and server-based gaming terminals through a single account.

New licensees include existing online operators upgrading or diversifying their offering, land-based casino groups, government sponsored entities such as lotteries, and new entrants making their online gaming debut, particularly in newly-regulated markets.

Founded in 1999, Playtech has some 1,000 employees located in development centres in five countries, the majority of whom are engaged in research and development of current and future gaming technologies, together with 900 employees providing ancillary services.

 

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