Playtech to Reinvent Financial Unit during Sale Reports

Playtech, a global leader in the iGaming industry, undertook a significant strategic initiative concerning its financial trading division, TradeTech, a few years ago. This unit underwent a major rebrand, transforming into Finalto, a move that unfolded amidst reports of the online casino game developer exploring options for divesting the business. These developments were crucial for Playtech as it aimed to streamline its operations and maximise asset value.

The rebrand of TradeTech to Finalto officially took place in January, reflecting a strategic shift and a clearer articulation of the unit's core identity. The new name, Finalto, was chosen to better represent its operations, emphasising finance as a central component and its ambition for continuous growth and advancement in the financial technology sector.

TradeTech's Evolution and Rebranding

The transition from TradeTech to Finalto was more than just a name change; it signified a new phase for Playtech's financial trading arm. Kate Ryan, then Head of Marketing for TradeTech, highlighted the excitement surrounding this rebrand, stating that it would usher in a fascinating new era for the firm and its clients. The goal was to establish Finalto as a formidable force in global financial technology.

Playtech initially established its financial trading division in 2017 through strategic acquisitions. This included the purchase of CFH Group for approximately $120 million (around ₹996 Crore) and FX and CFD market maker Alpha Capital Markets for $150 million (approximately ₹1,245 Crore). TradeTech, which encompassed Playtech's retail FX brokerage unit Markets.com, became a key part of this division.

Performance and the Path to Divestment

After a challenging performance in 2019, TradeTech saw a remarkable turnaround in the first half of 2020. Despite the global economic uncertainties caused by the coronavirus pandemic, which led to increased trading volumes and market volatility, TradeTech's revenue surged by over 123% in H1 2020, reaching €87.3 million (approximately ₹785.7 Crore). Basic earnings also saw a significant jump, rising to €52.8 million (approximately ₹475.2 Crore) in the first six months of 2020, compared to €8.2 million (approximately ₹73.8 Crore) in 2019.

Despite this improved performance, Playtech had already initiated a critical review of its financial unit's future following its 2019 results. Reports began circulating about the gambling firm's interest in selling TradeTech. Israeli news outlets indicated that various entities, including insurance firms Menora and Phoenix, Israeli entrepreneur Zvika Barenboim, investment fund Fortissimo Capital, and local Bank Leumi, were in discussions regarding a joint acquisition.

Playtech confirmed that it was indeed in talks with multiple interested parties for the divestment of its financial unit. The company clarified that these discussions were in their early stages and there was no guarantee of a transaction. Mor Weizer, Playtech’s CEO, emphasised that the company was not under pressure to sell the business, especially given its recent strong performance, and would only proceed if the right price was offered.

Ultimately, the strategic review culminated in the sale of Finalto. The transaction was completed in July 2022, with a consortium led by Gopher Investments acquiring the financial trading division for $250 million (approximately ₹2,075 Crore), aligning with the earlier reported bid range of $200 million to $250 million.