Playtika to Acquire Home-Design App Maker in $400 Million Deal
(Bloomberg) -- Playtika Holding Corp. is spending at least $400 million to acquire the maker of a home-decorating game, representing a diversification for a company that’s best known for its free-to-play casino titles.
The maker of games such as Bingo Blitz and Slotomania is buying 80% of Finland’s Reworks Oy for $400 million in cash, Playtika said Tuesday. The company can acquire the balance for as much as $200 million more in 2023, if earnings meet an agreed-upon target. If not, Playtika can buy the remaining ownership interest for $1.
Reworks’ popular design entertainment app, Redecor, lets players decorate homes. The platform the game is built on could also be used in the future for fashion, auto and restaurant-related titles, Playtika Chief Executive Officer Robert Antokol said in an interview. Playtika has considered as many as 40 different acquisition opportunities in the past six months.
“And then we found this very interesting company that had a great combination between home design and game elements,” Antokol said.
While some parts of the global game market, including PC and console-based titles, may decline from their pandemic-inflated levels, mobile gaming is still growing. The category is on track to generate $90.7 billion in sales this year, up 4.4% from 2020, according to researcher Newzoo. Decor apps may be growing faster.
The acquisition -- Playtika’s first as a public company and eighth overall -- is its biggest ever. Reworks brings about 35 people to Playtika’s 4,000-person workforce, Antokol said. It will contribute about $30 million to Playtika’s sales this year.
Founded in 2010, Playtika has more than 36 million monthly active users. It went public in January, and raised $1.88 billion in the biggest-ever listing by an Israel-based company. The company’s shares are trading slightly lower than the price they debuted at.
Earlier this month, Playtika reported second-quarter revenue that topped the average analysts’ estimates. The company expects 2021 revenue of $2.6 billion and still has $1.4 billion in cash and a revolving loan left for other acquisitions, according to Antokol.
“We are speaking with everyone. Everyone knows us,” he said. “We have the money to make even bigger deals.”
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