Playtech and PTTS agree 'landmark' Ladbrokes deal
Agreement comes less than two weeks after price being agreed for sale of software provider's stake in William Hill Online.
Playtech has announced a long-term licensing deal with Ladbrokes which will see the operator given access to Playtech’s full technology and software suite.
The agreement “ set to last a minimum of five years – will also see Lads take on advisory services from PT Turnkey Services (PTTS), the holding company for affiliate business Europartners which Playtech acquired from majority shareholder Teddy Sagi in 2011 for a nine-figure sum.
As part of the deal, Ladbrokes has also confirmed the acquisition of privately owned online and offline CRM business The Nation Traffic for £850,000, with the company being renamed Ladbrokes Israel.
The news comes less than two weeks after William Hill agreed to pay £424m for Playtech’s 29% stake in William Hill Online, an agreement which allowed the software provider to enter into agreements with the operator’s rivals, such as Ladbrokes.
Following the agreement, Lads will launch a new ‘Vegas’ tab “ offering Playtech’s casino and games suite across online mobile and tablet “ with other products such as poker set to follow.
Meanwhile PTTS will advise the operator on the best methods for driving digital revenues after the egaming division saw a year-on-year revenue decline of 39% in the operator’s last financial year.
In addition to royalties from the software agreement, Playtech will receive a “success fee” dependent on the ability of PTTS to improve Lads’ digital revenues.
Ladbrokes CEO Richard Glynn described the agreement as “The next phase of [our] reinvigoration,” noting “[It] will see us work closely with Playtech to increase customer lifetime values through enhanced CRM, an area in which Playtech has a proven track record.”
Mor Weizer (pictured), CEO of Playtech, described the agreement as “A landmark transaction for Playtech that clearly demonstrates the value of PTTS and the diversity of Playtech’s business offering.
“Ladbrokes is one of the largest and most respected brands in the betting and gaming industry, and we are delighted to have secured the opportunity to play an important role in accelerating the growth of its digital business,” he added.
James Hollins, analyst with Investec, described the agreement as “The missing link” for Lads, noting: “A strong digital marketing/CRM function was, in our view, the key factor missing from the Ladbrokes online channel and we welcome the deal.
Hollins issued a ‘Buy’ recommendation, however analyst Simon French of Panmure Gordon reiterated his firm’s ‘Hold’ recommendation despite saying “We expect the partnership with Playtech to be well received and see significant long-term upside.
“We also think these agreements are significantly beneficial for Playtech given for no initial cost it is entitled to 27.5% of the uplift in profits and value from Ladbrokes’ Digital division,” added French.