CFH contributes EUR 1.8m to Playtech’s revenues in 2016

Maria Nikolova

The latest report from Playtech shows it paid total cash consideration of €38.6 million ($41.0 million) for CFH.

Playtech PLC (LON:PTEC) has earlier today published its final report for 2016, with FinanceFeeds’ attention pinned on the fortunes of the group’s financial division, especially after the acquisition of CFH Group in November last year.

As one would have expected, Playtech labels the acquisition as a landmark move set to expand the B2B operations of its financials division. According to the latest report, €1.8 million of new revenue has been contributed to Playtech’s consolidated accounts for 2016 after CFH’s acquisition was completed.

Needless to say, the Group offered some numbers on the acquisition.

Here is what the new report says of the CFH deal:

“The Group paid total cash consideration of €38.6 million ($41.0 million). The company will pay €0.3 million ($0.3 million) as additional working capital adjustment in the beginning of 2017.

The Group has a call option to purchase the remaining 30% of CFH at a valuation of 6 times 2018 EBITDA capped at a total consideration of $76.6 million less the initial consideration. The founder and CEO of CFH have certain put options over his 30% holding at the same valuation. The fair value of this option was recognised as a non current liability and reflected in the Groups’ statement of changes in equity. The fair value as of 31 December 2016 was €16.9 million.”

Here is what the previous report says of the deal:

“The Playtech Group will pay up to $120m (€110.1m) for CFH. This comprises:

· an initial consideration of $43.4m (€39.8m), on a cash free / debt free basis, for 70% of CFH’s fully diluted share capital, representing a multiple of approximately 7x the current EBITDA run rate; and

· an additional consideration for the remaining 30% of CFH which will be subject to a put and call option which is exercisable in 2019 at a multiple of 6.0x CFH’s adjusted EBITDA for the year ending 31 December 2018, capped at $120m less the initial consideration ($76.6m) for the 30%.”

A couple of differences to note:

  • A small difference in the amount of the initial consideration paid.

  • No mention of the famous $120 million figure in the new report.

The latter only confirms FinanceFeeds’ stance that it is not 100% certain that Playtech will eventually pay as much as $120 million for CFH. As FinanceFeeds has stressed in its analysis, the details of how the deal is structured are far more important to consider than the numbers themselves.

Moreover, it is useful to recall previous deals in the non-bank FX industry – deals structures in this manner, such as GAIN Capital’s acquisition of City Index, which was completed in April 2015. The actual transaction between City Index and GAIN Capital at the time of bid in October 2014 was reported to be $118 million, however subsequently, it emerged that the net purchase price was actually $82 million, including $36 million in cash.

Read this next

Industry News

Horizon Software rebrands to Horizon Trading Solutions

“Horizon Trading Solutions has seen accelerated global growth over the past year to meet the rising demand for our trading solutions and built-for-purpose technology offering. The choice to rebrand represents a key part of this development, while maintaining our heritage and history in the industry.”

Market News

USDJPY has surged to levels last witnessed in 2022. Should we consider opening a short position?

The recent resurgence of the US dollar has propelled USD/JPY to new heights, touching levels not seen since 2022. This surge comes against the backdrop of stable short-term yields and ongoing economic data that fails to signal a significant slowdown, prompting questions about the extent of current monetary easing measures.

Digital Assets

DED Trends on Twitter After Memecoin Snapshot Announcement

Polkadot-backed community coin #DED, made it to the trending charts on X, demonstrating community’s engagement and interest behind the memecoin. 

Digital Assets

BlockDAG Presale Nears $10 Million Amid Toncoin’s Momentum, Green Bitcoin’s Presale, and the Rise of Other Top Cryptos

This article will examine three top trending topics: Toncoin’s potential, Green Bitcoin’s innovative presale, and BlockDAG’s sustainable mining approach. These cryptocurrencies take centre stage for their uniqueness and innovation.

Digital Assets

Coinbase scores minor victory vs SEC, but lawsuit to proceed

A federal judge in Manhattan, U.S. District Judge Katherine Polk Failla, ruled on Wednesday that the U.S. Securities and Exchange Commission’s (SEC) lawsuit against Coinbase can largely proceed.

Web3

COTI Teams Up with Civic for Enhanced Digital Identity Control

СOTI and Civic are teaming up to enhance digital identity security in Web3, aiming to provide users with more control over their digital selves through innovative technology.

Digital Assets

BlockDAG Takes on Chainlink (LINK) Crypto, and RON With DeFi Card and 5000x Profit Potential

Explore BlockDAG’s innovative DeFi card, which transforms cryptocurrency into spendable cash, alongside Chainlink (LINK) crypto and Ronin’s advancements.

Digital Assets

Court finally decides on Sam Bankman-Fried sentence, experts predict 20 years

Sam Bankman-Fried, the former CEO of the now-defunct cryptocurrency exchange FTX, is set to face sentencing on Thursday in a pivotal moment that could see the entrepreneur beginning a lengthy period in federal prison.

Crypto Insider

DeFi Winter Thaws: A Look at the Emerging Landscape

The past year has seen a significant shift in the Decentralized Finance (DeFi) market, transitioning from a period of decline (“DeFi winter”) to a potential season of growth.

<