Playtech Acquiring CHF Group for $120m to Add B2B Services to Their Offering

Ivan P. - November 15, 2016

Industry

Playtech moves in to acquire the CHF Group in an attempt to improve their position on the financial market through B2B offering.

Playtech, the company best known as a casino software developer, has decided to expand the scope of its activities by acquiring Consolidated Financial Holdings (CFH). The $120 million-worth deal will allow Playtech to obtain an even firmer grasp on the financial market.

A Surprising Move

Up until this point, Playtech's financial market activities have mostly been limited to retail financial trading. However, securing the CHF deal the company will now start building their B2B offer, directing clients' trades outside of the system to the wider market.

This will be possible thanks to CHF's Straight Through Processing technology which incorporates risk and liquidity management tools, multi-asset execution, and brokerage services. This move shows Playtech is ready to do away with their former policies which focused primarily on consumer-facing companies.

Deal Details

Unlike their earlier attempts to purchase AvaTrade and Plus500, which fell through due to lacking approval from regulatory authorities, the FCA has already given the green light for the CHF deal. Playtech will initially pay $43 million for 70% of the company, with an option to buy the remainder of the shares after 2018. A total price will not exceed $120 million.

Following on the deal details being revealed, Playtech's shares experienced a significant surge of 3.2%, bringing the company's total worth close to £3 billion. This is a clear indicator that investors support this new direction Playtech has been following.

Why CHF?

Although Playtech probably had the means to purchase any similar company to execute their future plans, CHF Group seemed like a perfect fit. With more than 400 partners and customers in more than 80 countries across the globe, the Group indirectly services thousands of retail clients.

They have the required technical means and knowledge and the company has been showing a growth lately, thanks to an increased interest in trading and an organic growth of the customer base. The annual revenue run rate for the company stood at $29 million at the end of 2015.