Playtech acquires CFD firm Plus500 in £460m deal
CEO Mor Weizer hails "transformational" deal just weeks after acquiring foreign exchange and currency brokerage firm TradeFX
Playtech has agreed a deal to acquire retail CFD trading company Plus500 for £459.6m as the software supplier expands its position in the online financial trading sector.
Under the terms of the deal, Playtech will pay 400p per share for AIM-listed Plus500 and comes on the back of Playtech’s recent £333m deal for a majority stake in foreign exchange and currency brokerage firm TradeFX.
Playtech said group financial officer Ron Hoffman would now assume additional responsibilities and become chief executive of the firm’s growing financial trading business.
Plus500, which last year reported turnover of $228.9m (£150m), hit the headlines last month after being forced to freeze all UK customers’ accounts following a review of its Anti-Money Laundering processes by the Financial Conduct Authority (FCA).
The move led to a drop in revenues at the firm and saw its share price plummet 67% in a week.
The review has also seen Plus500 come under greater scrutiny in other jurisdictions with the firm requested to provide further information regarding its operations.
Despite these pressures, Playtech CEO Mor Weizer described the acquisition as “transformational” and said he expected Plus500 to be immediately earnings enhancing for the business.
“Having recently completed the acquisition of TradeFX, the opportunity to acquire Plus500 will prove transformational for our ambitions to expand Playtech’s wider offering,” he said.
“As an immediately earnings enhancing acquisition, the combination of the two businesses is compelling, enabling us to apply our market-leading products and services to the enlarged financial trading business as we continue to execute our growth strategy for the Group,” Weizer added.
The firm added that the addition of Plus500 to TradeFX would enable the combined business to “maximise market opportunity” while Playtech would also provide Plus500 with its CRM tools to improve the its standalone financial performance.
The deal, which is expected to be completed by September, follows recent press reports that Playtech was in talks to acquire to buy currency trading platform AvaTrade for approximately £64m.
Playtech and Plus500’s share price at the time of writing was 790p and 393.25p respectively.