Playtech in Advanced Talks to Sell Finalto for $200M

Finalto, Playtech’s financial arm, may soon find a new home as the company is in advanced talks to sell what it considers a non-core asset for at least $200 million.

Playtech Confirms Intention to Sell Finalto

Starting the week, Playtech confirmed that it has entered into exclusive talks with a consortium to sell its financial arm, Finalto. With rumors swirling for a while now, this is the first time the company confirmed that the deal was a possibility.

Playtech explained that the company is discussing the potential sale of what it considers a non-core asset for $200 million. Regardless of the focus or lack of on the business, Finalto has performed well during the pandemic, pulling in good results.

In pure numbers, Finalto generated €87.3 million in revenue during the first half of 2020, or a 123% increase year-over-year.

The consortium initiating the talks consists of four established companies, including Barinboim Group, Leumi Partners, The Phoenix Insurance Company and Menora Mivtachim Insurance.

Selling the subsidiary right away would guarantee a quick cash injection as $170 million will be paid on the spot. Playtech did say, though, that in the event of a sale, an estimated $110 million of capital that is needed to keep Finalto operational would be transferred as well.

Not a Sealed Deal

Playtech did caution, though, not to interpret the announcement as a confirmation of a sale, as the talks were still ongoing and Playtech retained its right to withdraw from the negotiations if it deemed the conditions unfavorable:

“Whilst discussions are progressing, there can be no certainty that any transaction will be forthcoming nor on what terms it would occur.”

-Playtech

The potential sale of Finalto is motivated simply by Playtech’s desire to streamline its business offer and shed non-core assets, allowing the company to remain focused on what it considers key verticals for its further growth and success.

Playtech is reportedly approaching other parties to discuss opportunities for the sale of Finalto, which has shown resilience and remains in a good position to be sold to the benefit of the FTSE250 technology group.

Playtech’s own performance has been strong of late. The company’s trading update earlier this month revealed that its market performance for 2020 is ahead of market consensus. The company is also one of the few to choose the United Kingdom as a tax residency despite the uncertainties surrounding Brexit.