Gaming solution provider Playtech have announced a deal to acquire one of the biggest and best-established brands in the Italian gaming market, Snaitech, a gaming and racetrack business backed by Investindustrial. Playtech is acquiring 70.6% of the company and has also committed to a mandatory bid to take over the remaining percentage. The total price is €846 million, subject to any relevant anti-trust issues which could arise and to the approval of the Italian gaming regulator, the Agenzia delle dogane e dei Monopoli (ADM).
Snaitech has been going strong; it owns three racetracks across the Boot and runs online sports betting and casino action on .it. Their revenue for 2017 stood at €890 million, with €136 million in earnings. The firm was the result of a 2015 merger between horse-racing firm Snai and lottery machine firm Cogetech; both firms were already backed by Investindustrial by that time. Investindustrial itself is a leading European Investment Group formed back in 1990 which holds a diverse portfolio including investments in Aston Martin, Sergio Rossi and Ceme Group.
Playtech, on the other hand, has struggled in recent times, and this deal looks set to boost their overall outlook as reflected in a bump in share price of 4.7% in afternoon trading following the news. The firm warned of a sharp downfall in their trading during early 2018, where their average daily revenue for their business-to-business division was down 11% year-on-year across the first 51 days of the calendar year. Their business-to-consumer division was reportedly performing to expectation, however.
As part of a presentation for investors following the news, Playtech Chief Executive Officer Mor Weizer made the following statement analyzing the investment and its timing: “Italy is the biggest market by Gross Gaming Revenue in Europe, over €20 billion, larger than the UK. However, the online market is still unsophisticated and under developed, with online penetration still only 7% compared with 41% in the more mature UK market.
“The Italian market is still very fragmented; the top five online operators in Italy currently have a market share of 56%, compared to 87% for the top five in the UK. The combination of low online penetration, market fragmentation, lack of sophistication and most importantly the fact that Snaitech is the number one sports brand, represents a significant opportunity for the combination of Playtech and Snaitech to capture market share.” It is certainly a significant achievement for the firm and should improve their outlook for the year ahead.
