Playtika sold to Chinese consortium for $4.4 billion

Caesars Entertainment Corp. (CEC) has confirmed the sale of its mobile and social gaming asset Playtika Studios to a Chinese consortium that includes Giant Interactive Group, in a US$4.4 billion all-cash deal, implying a valuation of 16.0x LTM EBITDA. 

The operator made the announcement on Sunday, stating it had entered a ‘definitive agreement’ for the sale of Playtika, which forms a core part of Caesars Interactive Entertainment (CIE).

Last week it was revealed that the consortium, which includes Giant – an online games developer – emerged as a leading contender for the business after an auction process.

The Chinese consortium also includes Yunfeng Capital, a private equity firm founded by Alibaba Group founder Jack Ma, accompanied by China Oceanwide Holdings Group Co, China Minsheng Trust Co, CDH China HF Holdings and Hony Capital Fund.

It is understood that Playtika would keep its headquarters in Israel, with its existing management team running day-to-day operations.

Playtika operates leading social casino games including Slotomania, which had been acquired by CEC in May 2011 for $100 million as the casino operator set-up its interactive gaming division. CEC governance confirmed that no other CIE assets would be sold in the transaction.

Closing its acquisition, Shi Yuzhu founder of Giant Group commented: “Playtika’s growth has been exceptional and highlights its outstanding team, excellent corporate culture, cutting-edge big data analytics, and its unique ability to transform and grow games. We are looking forward to Playtika continuing to innovate and excel.”

Robert Antokol, Co-Founder and CEO of Playtika, commented on the agreement: “This transaction is a testament to Playtika’s unique culture and the innovative spirit of our employees who for the past six years have consistently designed, produced and operated some of the most compelling, immersive and creative social games in the world.

“We are incredibly excited by the commercial opportunities the Consortium will make available to us, particularly in its ability to provide us access to large and rapidly growing emerging markets. This is an amazing milestone for all Playtikans and we truly value how unique this opportunity is to continue executing our vision with such a strong partner.”

The transaction is also seen as a valuation positive for IGT and its social gaming business, DoubleDown. Union Gaming estimates that IGT’s DoubleDown social gaming business could be worth upwards of $2.0B, meaning the rest of IGT’s business is currently being valued at bargain levels.