Caesars Acquisition Corp. and Shanghai Giant Network Technology Co., Ltd. announced Saturday that a consortium of Chinese firms has acquired Playtika, the social and mobile gaming division of Caesars Interactive Entertainment, Inc. (CIE). The deal, which was rumored to be in the works less than two weeks ago, is worth $4.4 billion.
According to a press release, the Chinese consortium consists of “Giant Investment (HK) Limited; Yunfeng Capital, a private equity firm founded by Alibaba Group Holding Ltd. founder Jack Ma; China Oceanwide Holdings Group Co., Ltd.; China Minsheng Trust Co., Ltd.; CDH China HF Holdings Company Limited; and Hony Capital Fund.”
This looks to be a good deal for Caesars, as it gets the multi-billion dollar cash injection, which may help with its current bankruptcy issues, while CIE did not have to give up the World Series of Poker brand or WSOP.com. Despite Caesars’ financial issues, CIE has actually done quite well, posting an EBIDTA of over $360 million this year. Though the WSOP and WSOP.com are the most recognizable brands of CIE, the company was obviously an attractive acquisition without them. The WSOP is quite profitable in and of itself, as well, so finding a way to keep it was a shrewd move by CIE.
The consortium, to this point, has no plans to make any drastic changes to Playtika’s operations. It will continue be headquartered in Herzliya, Israel, will remain its own entity, and current management will continue to be in place.
Robert Antokol, Co-Founder and CEO of Playtika, said of the business deal:
This transaction is a testament to Playtika’s unique culture and the innovative spirit of our employees who for the past six years have consistently designed, produced and operated some of the most compelling, immersive and creative social games in the world. We are incredibly excited by the commercial opportunities the Consortium will make available to us, particularly in its ability to provide us access to large and rapidly growing emerging markets. This is an amazing milestone for all Playtikans and we truly value how unique this opportunity is to continue executing our vision with such a strong partner.
Though Playtika’s games are generally free-to-play, as we all likely well know, free mobile and social games usually offer plenty of opportunity for players to spend real money by purchasing virtual currency. This virtual currency can be used in a variety of ways in free-to-play games, such as extending the time a player can play (in Playtika’s case, that might involve buying more chips if one goes “virtually broke”), purchasing items that enhance game play, or even just buying vanity items like costumes for a player’s character.
“It has been a particularly rewarding experience growing Playtika from a 10-person start-up, when CIE acquired them in 2011, into a global leader,” said Caesars Interactive Entertainment Chairman and CEO, Mitch Garber, in the press release. “Playtika today is a highly profitable growth company with more than 1,300 employees, multiple top grossing titles and millions of daily users. Robert is a true visionary and Israeli business leader who has created not only a great business, but also the most unique corporate culture I have seen in my career.”
