Playtech acquires troubled Plus500 in £459.6m cash deal

Spread betting firm Plus500 has been snapped up by FTSE 250 listed gaming company Playtech in a £459.6m cash deal.

The 400p-a-share price tag values the troubled business significantly below what it was worth prior to its recent difficulties, which have seen the UK financial watchdog scrutinize the systems it has in place to prevent money laundering.

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Playtech said that the scrutiny has meant Plus500 has stopped taking on new customers and that 2015 revenue is now expected to be lower than last year, with margins set to be "significantly lower due to maintained marketing spend".

Playtech chief Mor Weizer said: "Having recently completed the acquisition of TradeFX, the opportunity to acquire Plus500 will prove transformational for our ambitions to expand Playtech's wider offering."

In early April Playtech agreed to acquire forex and CFD provider company TradeFX, a company owned by Playtech's billionaire founder Teddy Sagi, for up to €458m (£335m).

"As an immediately earnings enhancing acquisition, the combination of the two businesses is compelling, enabling us to apply our market-leading products and services to the enlarged financial trading business as we continue to execute our growth strategy for the group," Weizer added.

The Playtech board was attracted by Plus500's market reach, advanced technology, product offering and existing customer relationships, it said. Plus500's management team, who supported the deal, have agreed to remain part of the business for the first year after completion.

The chief executive of Plus500, Gal Haber, said his team was "very proud to have built Plus500 in a short time into a significant player in the CFD market".

"Having been admitted to AIM at a share price of 115p on 24 July 2013 and paid significant dividends during this time, we believe that now is the right time to combine the business with Playtech who can provide additional infrastructure and expertise to add to our core skills in products, technology and marketing," he added.