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Reuters reports that Playtech's breakup looks worth a flutter.


A roulette table at Japan Casino School in Tokyo, Japan has a spinning wheel. This picture was taken on August 4, 2018.
LONDON, Feb 3 (Reuters Breakingviews) - Playtech’s (PTEC.L) hopes for a sale keep turning into busted flushes. The gambling technology firm’s investors on Wednesday rejected an offer from Aristocrat Leisure (ALL.AX), valuing it at 3.2 billion euros including debt. A mooted bid from former racer Eddie Jordan has also fallen apart. Happily, the group may be able to unlock value by splitting its Italian bookie operations from its technology division, which serves operators like Switzerland’s Casinò Lugano.
Refinitiv analysts polled expect Playtech's sales to have grown by 11% in 2021. If both units grew at an equal clip, the Italian unit could have generated 142 million euros of EBITDA. That would value the Italian unit at 7.7 times EBITDA, which would net 1.1 billion euros. To rival Aristocrat's offer, the remaining software division would need to be worth 2.1 billion euros. That's equivalent to a 15 times multiple, assuming EBITDA of 140 million euros.
It looks feasible. Gambling outfits La Francaise des Jeux (FDJ.PA) and Tabcorp (TAH.AX) both trade at around 12 times EBITDA, per Refinitiv, while Sweden’s Evolution (EVOG.ST) is valued at 30 times. Playtech said on Thursday that another buyer, TTB Partners, may swoop. Either way, investors are still holding a good hand.
The author is a Reuters Breakingviews columnist. The opinions expressed are their own. The author is a Reuters Breakingviews columnist. The opinions expressed in this article are their own.
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