Aristocrat bolsters digital division with $500m social games acquisition
Sydney-listed firm says deal will give it access to the $43.6bn social games market
Aristocrat has bolstered its interactive business with the $500m purchase of Israeli social games developer Plarium.
Aristocrat, which acquired social casino firm Product Madness back in 2012, said the latest deal would expand its addressable market from the $3.2bn social casino segment, to the broader $43.6bn social games market.
Aristocrat will pay $500m cash upfront, with earn-outs arrangement payable to Plarium shareholders following the end of calendar years 2017 and 2018 respectively, based on 10x the last 12 months EBITDA.
Plarium is headquartered in Herzliya, Israel and has over 1,200 employees across five genre-specific studios. The company has nine key titles that are currently monetising with Vikings: War of Clans perhaps its best known.
“The strategic and financial benefits are compelling for Aristocrat shareholders,” group CEO Trevor Croker said.
“Following the acquisition of Product Madness in 2012, Aristocrat’s Digital division experienced exceptional growth and Product Madness is now a top five social casino gaming publisher globally.
“Plarium provides a unique opportunity to continue and accelerate this growth by diversifying into attractive new mobile gaming segments, including Strategy, RPG and Casual. The acquisition of Plarium increases our pro forma Digital revenue contribution from 14% to 22% for the year ended 31 March 2017.”
“The transaction will not only transform the scale of our Digital business today, but will also preserve Aristocrat’s options to pursue acquisitions in the future in key growth segments.”
Plarium CEO Avraham Shalel, who will continue to lead the firm following the acquisition, added: “Aristocrat is an ideal partner for us given our common aspiration to be a global leader in social gaming, which will be accelerated through leveraging Aristocrat’s financial, strategic and operational resources.”
The deal is expected to complete in December.