Published by CasinoTopsOnline on April 7, 2015 in Industry News

Playtech LogoPlaytech shares recently saw an initial 5% spike in value on the heels of a landmark announcement by the online casino gambling service provider.

Rather than try to compete in the online game development arena or come up with a new casino product Playtech is looking to diversify its business portfolio which resulted in increased shareholder confidence in the company.

Playtech made a successful bid to purchase a controlling share in the forex and payment services provider, TradeFX (known for its online brand 

Playtech’s Chief Executive Officer, Mor Weizer, stated that they “intend to offer TradeFX trading platform to all of Playtech's licensees and other gaming companies, given the fact that the trading platform is complementary to gaming companies' operations”.

The acquisition agreement between Playtech and TradeFX is a two part agreement. Playtech will acquire the majority share, set at 91.1%, for an initial investment of €208 million.

Looking to the future growth in acquisition of new customers and binary options income they have also tabled an additional amount of up to €250 million should predetermined targets be met.

While Mor Weizer was quick to state that Playtech casinos will remain their core product, he added that the “acquisition adds weight to the strong momentum with which we have started the year and which has continued throughout the first quarter. Following the acquisition, Playtech will retain significant resources to continue to pursue further acquisition opportunities.”

While referencing their strong growth in Q1 2015 it is no secret that Playtech has faced some challenges in terms of legislation and licensing in their core markets. This move to acquire a company outside of its core product is therefore not a complete surprise. The primary reason for this being business savvy billionaire Teddy Sagi.

Sagi is a major shareholder in both companies and presented the acquisition as a viable way to best build off Playtech’s core skills while using TradeFX’s reach into 100 countries (serviced in over 25 languages) to their advantage. The acquisition of TradeFX opens up new financial channels and markets to Playtech. It also present an opportunity to legally monetise its huge customer databases in markets currently closed to them in the online casino vertical.

Weizer was confident that the acquisition is a "compelling opportunity" to enter a new vertical which is "driven by similar core competencies".

Weizer also confirmed that an update on the performance of the trading company will be available at their "quarterly trading update which will be announced later this month".

The success or failure of this bold business decision is sure to be a hot discussion topic in the months that lie ahead.