Aristocrat to acquire Israeli game development company Plarium for US$500 million

ASX-listed poker machine manufacturer Aristocrat has announced its acquisition of Israeli game development business Plarium for US$500 million ($667 million) in a bid to grow into the digital space.

Founded in 2009, Plarium has over 1,200 employees working across five genre-specific studios, and offices around Europe, Israel, and the US.

The company stated it has nine key monetised titles, with Vikings: War of Clans its most popular to date; it recorded EBITDA of $US44 million from $US201 million in revenue in the 12 months to March.

Trevor Croker, CEO and managing director of Aristocrat, said that with Aristocrat growing its digital social casino business, the acquisition will allow the company to expand its addressable market into “logical adjacent segments” in the mobile gaming market.

According to Croker, the acquisition expands Aristocrat’s addressable market from around US$3.2 billion in the social casino segment to approximately US$25.4 billion when including the strategy, RPG, and casual segments.

“Plarium’s business is strongly aligned with Aristocrat’s, with similar operational approaches to game development and segment and market entry, common focus on producing the world’s best gaming content and a common aspiration to be a market leader in our key target segments,” he added.

“The transaction will not only transform the scale of our digital business today, but will also preserve Aristocrat’s options to pursue acquisitions in the future in key growth segments.”

Expected to be finalised in December, the acquisition will be funded through existing cash, and an incremental US$425 million seven year Term Loan B debt facility.

Plarium’s CEO and cofounder, Araham Shalel will continue to lead Plarium following the acquisition.

“Aristocrat is an ideal partner for us given our common aspiration to be a global leader in social gaming, which will be accelerated through leveraging Aristocrat’s financial, strategic and operational resources,” he said.

With the most recent study from the Interactive Games & Entertainment Association finding that 68 percent of Australians play video games, a growing number of Australian corporates are looking to the space.

The Seven Network in June announced a new partnership with St George Bank that will see the organisations work together to launch screenPLAY, a new omni-channel focused on gaming and esports content.

Producing game related content, the multi-network will make its debut on 7mate, social media and Seven’s digital streaming platforms, accompanied by live events following the launch of an exclusive esports competition, ‘screenPLAY league’.

Similar to ‘leagues’ found in traditional sports, screenPLAY league will foster scheduled competitions across major competitive gaming titles such as League of Legends and Counter Strike: Global Offensive, which will be streaming online.

The move followed the AFL’s Adelaide Football Club in May acquiring Legacy eSports, a professional eSports team based in Sydney.

Andrew Fagan, CEO of the club, said its investment in the eSports industry will help expand the scope of its fan engagement, brand, and commercial platform. In particular, he said the popularity of eSports among millennials will provide “enhanced opportunities” for corporate partners old and new to engage with younger, more digitally-savvy audiences.

Image: Trevor Croker. Source: GGRAsia.