In a merger whose effects are being felt across the online gambling world, it was announced today that Playtech will be one of the biggest winners in the proposed wedding between British bookmakers Ladbrokes and Gala Coral.
The merger of the two groups in the $3.4 billion deal will result in a massive payout for Playtech under a marketing services and provisions contract it has in place with Ladbrokes. Playtech will earn nearly $160,000,000 once the merger is completed. $85 million will be paid through Ladbrokes/Gala Coral share issuance, while the rest will be paid in cash if the operational milestones are met with two years of the completion of the merger.
Playtech Provides Platforms to Both
Playtech provides games and platforms to both operators at the moment.
"Both Ladbrokes and Coral are key licensees of the Group and we have been delighted to assist Ladbrokes in the turnaround of its online operations, again demonstrating the strength of Playtech's turnkey offering," noted Mor Weizer, the chief executive director of Playtech. "We look forward to continuing our strong long term relationships with both groups and expect to play a key role in their future success, both before and after their proposed merger."
New Group Ladbrokes Coral Plc
The new gambling entity that will be formed by the merger between Ladbrokes and Gala Coral will be known as Ladbrokes Coral Plc, and is set to become the biggest gambling group in Great Britain.
Both brands will be separately maintained, although some of their combined 4,000 betting shops in the UK may need to be sold in order to satisfy competition regulators.
"This is a major strategic step for Ladbrokes which firmly accelerates our strategy to improve the customers' experience and build recreational scale," noted the chairman of Ladbrokes, Peter Erskine. "Ladbrokes and Coral are two highly complementary businesses, with rich heritage and brand presence across the UK and internationally."
"Together, we will create a leading betting and gaming business combining strong brands with an attractive multi-channel offering and an extensive national and international coverage," he added. "The transaction will provide an attractive opportunity to generate considerable value for both sets of shareholders, through significant operating synergies and a strong cash flow profile."
Ladbrokes launched its Australian arm in September 2013, by first purchasing the local bookie Bookmaker.com.au and then launching Ladbrokes.com.au. The companies are licensed by the Norfold Island Gaming Authority.