London-listed gaming technology and services provider Playtech has acquired UK-based ACM Group (Alpha) to strengthen its financial trading division, which will now be renamed TradeTech Group to better reflect the full capabilities of the business.
Playtech will make an initial up-front payment of US$5m to acquire Alpha, with the total consideration capped at $150m. This includes two staged payments based on 1 x EBITDA of 2017 and 2018, and contingent consideration based on 5.2 x the 2019 EBITDA.
The deal is in line with Playtech's strategy to acquire bolt-on technology and additional services, and includes various assets including a portfolio of international B2B clients, proprietary trading technology, and the institutional focused Alpha Pro trading platform.
In addition, Alpha’s trading, risk, dealing and business development teams will join TradeTech, including approximately 20 staff based in the UK.
"This is a significant step in the evolution of TradeTech,” said Ron Hoffman, CEO of Playtech's Financials division. “The financial trading industry is driven by the core capabilities of platform technology, customer acquisition and retention, CRM management, and financial trading and risk management expertise.
“The acquisition of Alpha's high-quality technology and teams of industry experts will significantly deepen our expertise in trading and risk management, allowing TradeTech Group to offer a full turnkey solution to B2B clients across the industry.”
Playtech’s Financials division, officially renamed TradeTech, will now comprise the B2B solution TradeTech Alpha, contracts-for-difference (CFD) and forex provider Markets.com, and CFH, which provides forex liquidity services.
The business will also establish a new B2C brand for high-net worth clients, MarketsPro, following the acquisition which includes the Financial Conduct Authority-licensed Alphacapitalmarkets.co.uk site.
"This is a natural fit for Alpha,” said CEO Muhammad Al-Amin Rasoul. “The strength of TradeTech Group's management team and asset base will provide us with a platform to grow our offering with TradeTech Alpha.
“Not only does TradeTech offer everything that you need for a complete B2B solution for brokers, but you can get that solution from the most financially secure company in the industry. We could not be happier to join the family and start this next exciting chapter at TradeTech Group with the newly launched TradeTech Alpha brand."
Completion of the acquisition, which is subject to customary closing conditions, is expected to occur by the end of September.
Cenkos Securities analyst Simon French noted that the reshaping of Playtech’s Financials division would “likely heighten speculation it will be spun off as a separate business”.