Playtech says CFH performs well, hints at further M&A in Financials division

Maria Nikolova

Playtech said that CFH continues with solid performance after its November acquisition but did not provide any numbers, nor more details on the price to be paid for CFH.

The announcement about the purchase of CFH Group by Playtech PLC (LON:PTEC) in November 2016 made a media splash, mostly because of the somewhat complex structuring of the acquisition which resulted in a lack of clarity regarding the actual price to be paid for CFH. We had been expecting to have more details on that today, as Playtech posted a brief AGM Trading Statement but, unfortunately, the filing with the LSE did not provide more substantial information on the deal.

Nevertheless, there are at least two takeaways from today’s announcement:

  • CFH Group continues to perform well after the November acquisition;
  • Playtech keeps discussing further acquisitions in the Financials division.

According to Playtech’s annual report for 2016, €1.8 million of new revenue has been contributed to its consolidated accounts for 2016 after CFH’s acquisition was completed.

Here is what the annual report said 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.”

Importantly, there was no mention of the $120 million figure for CFH’s acquisition in the annual report.

This is in tune with FinanceFeeds’ view that it is not 100% certain that Playtech will eventually pay as much as $120 million for CFH. As FinanceFeeds has noted in its analysis, its is more important to consider the details of how the deal is structured than the numbers themselves.

Read this next

Digital Assets

US, UK probe $20 billion Tether transfers tied to Russian exchange.

U.S. and UK authorities are investigating the movement of $20 billion in the USD-pegged stablecoin tether (USDT) through Moscow-based exchange Garantex.

Digital Assets

BlockDAG Presale Raises $9.9M as Batch 5 Nears Sell-Out Amid Bonk’s Fluctuating Trading Volume & Spell’s Bullish Price

Explore BONK’s trading volume, SPELL’s market shifts, and why BlockDAG’s 10,000 ROI makes it an ideal crypto for savvy investors in 2024.

Digital Assets

Bybit expands into Europe amid regulatory scrutiny

Dubai-based cryptocurrency exchange Bybit is expanding its operations in Europe after encountering regulatory challenges in Hong Kong.

Digital Assets

Cathie Wood’s sponsored Bitcoin ETF sees historic $200 million inflows

The ARK 21Shares Bitcoin ETF (ARKB), co-sponsored by Cathie Wood’s ARK Invest, registered historic inflows exceeding $200 million on Wednesday, signaling a robust appetite among investors for Bitcoin-centric investments.

Digital Assets

Sam Bankman-Fried might see his 25-year sentence halved

Sam Bankman-Fried, the founder of the failed cryptocurrency exchange FTX, was sentenced to 25 years in federal prison by a Manhattan court on Thursday. This comes after he was convicted of defrauding customers and investors, with Judge Lewis Kaplan highlighting the potential future risks posed by Bankman-Fried.

Technical Analysis

EURJPY Technical Analysis Report 28 March, 2024

EURJPY currency pair under the bearish pressure after the pair reversed down from the major resistance level 164.25, which also stopped the sharp weekly uptrend at the end of last year,

Digital Assets

BlockDAG’s Presale Hits $9.9M, MultiversX & MINA Price Predictions Show Green

Read about BlockDAG’s promising $10 prediction and insights on MultiversX Price Prediction as MINA’s potential unfolds.

Digital Assets

Rockstar Co-Founder and All-star Line Up Join Advisory Board to Take Metacade into Post Beta Orbit

Metacade, the revolutionary Web3 gaming platform, prepares to streak out of beta with a slew of ground-breaking initiatives that will redefine the way blockchain games are developed.

Retail FX

Prop firm The Funded Trader shuts down, claims relaunch in April

Prop trading firm The Funded Trader has ceased all operations, with claims for a relaunch in the near future.

<