Aristocrat Leisure has agreed a deal to sell its casual gaming business Plarium Global for US$620 million to Stockholm-listed mobile games provider Modern Times Group (MTG).

The company said that the divestment of Plarium marked an important milestone for Aristocrat as it focuses on growth in its core land-based gaming, real-money gaming and social casino segments.

“The sale of Plarium follows a strategic review into our casual and mid-core gaming assets that we announced in May 2024,” said Aristocrat CEO and managing director Trevor Croker.

“With the expanded Aristocrat Interactive business now sitting alongside Aristocrat Gaming and our market leading mobile social casino business, we are increasingly focused on opportunities to lean into Aristocrat’s strengths in regulated gaming content and social slots.”

The total consideration for the sale comprises a fixed consideration of $620 million, including $600 million payable upon closing of the transaction and a deferred payment of $20 million payable in April 2026.

The deal also includes contingent consideration of up to $200 million, subject to the achievement of certain financial targets over calendar years 2025 to 2028.

Proceeds from the sale will be deployed to fund Aristocrat’s longer term growth strategy, in line with its capital allocation framework, and will enhance Aristocrat’s revenue growth rate and margins going forward.

Acquired in October 2017 for an initial $500 million, Plarium generated an internal rate of return (IRR) in the mid-teens during the period of its ownership.

In its unaudited financial results for the year to 30 September, Plarium contributed $615 million in revenue to Aristocrat subsidiary Pixel United, as well as $166 million in segment profit.

Aristocrat expects the sale of Plarium to be mid to high single-digit percentage points dilutive to net profit after tax and amortization (NPATA) in FY25 on an annualised basis.

“Aristocrat has incorporated a range of Plarium’s strategic capabilities and mobile content know-how into its core gaming operations over the past seven years, benefitting from digital marketing and UA management capability, enhanced live operations, and scaling and growing our combined social casino business,” continued Croker.

“We are pleased also to have achieved an IRR from the acquisition of Plarium in excess of our target rates. Our ownership of Plarium has helped to drive Aristocrat’s digital transformation, extending our track record of successfully acquiring businesses to accelerate our strategy.”

The transaction is expected to close in the first half of calendar year 2025 and is subject to customary closing conditions, including receipt of regulatory approvals.

MTG Group president and CEO Maria Redin commented: “I am proud and excited to welcome Plarium to MTG in this transformative deal, which elevates MTG into a leading European gaming group. In Plarium, we have found a great partner to evolve and accelerate together. They bring an exciting and highly successful portfolio of live games spearheaded by RAID: Shadow Legends, an exceptional evergreen mid-core IP, to our line-up. The studio also has three additional strong live games, and an exciting new games pipeline in both the mid-core and the casual segments, which creates healthy optionality for future growth.

“Plarium also has best-in-class tools for user acquisition and monetization. These tools will complement our own Flow Platform and boost the performance of some of our existing live titles. Plarium is led by a strong, experienced and dedicated team that fits very well into our entrepreneurial and driven culture and I look forward to welcoming them to the group.”

Aristocrat confirmed that its strategic review of Big Fish Games (excluding the Big Fish social casino assets) remains ongoing, with the company continuing to actively engage with third parties and assess all options to maximise shareholder value.

In its FY24 results, Aristocrat intends to take a goodwill impairment charge of $110 million in relation to Big Fish Games, excluding the social casino assets, which continue to perform well and are a core component of Product Madness, Aristocrat’s social casino business.

Shares in Aristocrat Leisure Ltd (ASX:ALL) closed 1.04 per cent lower at AUD$64.93 per share in Sydney Tuesday.