Friday March 01,2013 : PLAYTECH CONFIRMS SALE OF WHO INTEREST (Update)
Statement re William Hill Online gives details of the deal
Playtech and William Hill have confirmed that they have reached agreement on a deal that will see the latter exercise its option to buy Playtech's 29 percent interest in the William Hill Online enterprise for GBP 424 million, representing a multiple of approximately 11.5 times normalised 2012 EBITDA.
Playtech will continue to be entitled to a proportionate share of the FY2013 profits of William Hill Online, until the date of completion of the deal, a statement revealed.
Playtech has elected to receive the consideration entirely in cash. William Hill must complete the acquisition by the end of April 2013.
The Playtech statement notes that WHO was formed in December 2008 when Playtech injected assets then worth Euro 177.7 million into William Hill's existing interactive operations.
"This transformational transaction created an innovative and exciting gaming business, which has grown very strongly since inception," the statement notes. "William Hill Online is now one of the world's leading online gaming operators, consistently returning annual double-digit growth. To 31 December 2012, Playtech's total share of profits of William Hill Online (excluding software royalties) has been approximately Euro 140 million."
Playtech's software arrangements with William Hill Online will continue following completion of the call option, with Playtech stressing it is dedicated to maintaining a close working relationship to support William Hill Online's continued growth, and looks forward to benefiting from its future success.
The company says it is undertaking a broad review of the most effective use of the proceeds from the disposal, taking into consideration both feedback from shareholders and the group's requirements going forward.
"The Board will, amongst other things, be assessing the potential for further value-enhancing acquisitions, joint ventures and partnerships, with a focus on regulated markets, together with the possibility of a return of capital to shareholders," the statement advises.
Mor Weizer, Playtech's CEO, said: "William Hill Online has been an overwhelming success and has delivered a cash return to Playtech greater than 3.5 times its original investment, excluding software royalties in the four years since inception.
"The success demonstrates the potential to create value by combining a well-established brand with Playtech's best of breed technologies, products and services. I would like to thank the William Hill and William Hill Online management team for their efforts, and we look forward to our strong supplier relationship continuing."