Playtech and Will Hill Complete Transaction

Date Added: January 13, 2008

In October 2008 Playtech and William Hill had announced a major deal between the two companies. Now Playtech has announced that the transaction has been completed to the satisfaction of both parties. Playtech is one of the leading online gaming software providers. William Hill operates many online gaming portals that include poker, casino and sports betting.

The deal involved the acquisition of some of Playtech’s operations by William Hill. These operations included Playtech’s affiliate marketing business, customer services operation and gaming brands. William Hill was to acquire these operations through a newly created entity, William Hill Online. In return William Hill Online was to enter into a five year contract with Playtech for the provision of online gaming software for casino and poker. The deal provided for extending the contract period and for Playtech’s involvement in other product areas. The transaction required limited upfront cash payment and the capital expenditure, transaction costs and integration costs were expected to be in the region of £24 million.

The deal between Playtech and William Hill brings the synergy of combining complementary businesses. William Hill brings to the table highly successful online gambling brands, especially in the United Kingdom market. The assets acquired by William Hill bring in a profitable marketing expertise through an affiliate network that is very strong in the European market. This will be coupled with Playtech’s software network that in itself has considerable value.

In the new set up William Hill Online will be under the control and management of William Hill, with Playtech having a minority interest. William Hill will own 71% of William Hill Online and Playtech will own 29%. Future possibilities have also been provided for. Playtech’s share can increase to 32% subject to the fulfillment of certain conditions. William Hill has the option to acquire Playtech’s share at a fair market value. William Hill can take a call on this after four or six years. Playtech can acquire a limited interest in William Hill.

William Hill Online will be managed by Henry Birch who has been appointed as the CEO. In fact he has been on the job since October 2008 when the deal was announced. Birch earlier served as Chief Executive of Leisure & Gaming. Both William Hill and Playtech will contribute to the management team of William Hill Online. Eyal Sanoff will take over as Chief Marketing Officer and Peter Marcus as Chief Operating Officer. The finance and legal functions will be directly handled by William Hill. Avigur Zmora was the man who managed the integration process. He is to relinquish his position as a director of the company so as to enable the new team to take independent charge. His experience and knowledge of the business are immense and vital and therefore he has been asked to remain available as a consultant to the company.

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