Aristocrat Leisure has entered into a binding agreement to acquire social gaming company Plarium Global for an upfront amount of $500m (€426m) in cash.
In a statement confirming the deal, Aristocrat said that the acquisition will help to “significantly expand” its digital addressable market into “adjacent gaming segments”.
Headquartered in the Israeli city of Herzliya, Plarium is a privately owned, free-to-play mobile, social and web-based developer that employs over 1,200 people across five genre-specific studios and multiple offices throughout Europe, Israel and the US.
Plarium counts the likes of ‘Vikings: War of Clans’ among its product portfolio.
The acquisition deal also includes an earn-out arrangement payable to Plarium shareholders following the end of the 2017 and 2018 calendar years, based on 10x the last 12 months’ EBITDA at year end, less previous consideration amounts already paid in prior periods.
Aristocrat has also said that Avraham Shalel, chief executive and co-founder of Plarium, will continue to lead the business after the acquisition.
In addition, Shalel and 12 other key members of the company’s management team have agreed to retention and deferred consideration arrangements with Aristocrat, including deferring a portion of their upfront consideration, until the end of calendar year 2020.
Subject to the necessary regulatory approvals, the transaction is expected to go through before the end of the year.
Trevor Croker, chief executive and managing director of Aristocrat, said: “Aristocrat has continued to deliver significant growth and outstanding results in our digital social casino business.
“The acquisition of Plarium allows Aristocrat to expand our addressable market into logical adjacent segments in the fast-growing mobile gaming market.
“The strategic and financial benefits are compelling for Aristocrat shareholders.
“Following the acquisition of Product Madness in 2012, Aristocrat’s Digital division experienced exceptional growth and Product Madness is now a top 5 social casino gaming publisher globally.
“Plarium provides a unique opportunity to continue and accelerate this growth by diversifying into attractive new mobile gaming segments, including strategy, RPG and casual.”
Croker added: “The acquisition of Plarium increases our pro forma Digital revenue contribution from 14% to 22% for the year ended March 31, 2017.”
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