Playtika, a Herzliya-based gaming company owned by Caesars Entertainment Corp., said in a special announcement that their company is being acquired by a group of Chinese investors for $4.4 billion.
The consortium behind the buyout are Chinese business giants like Giant Investment Limited, an affiliate of Shanghai Giant Network Technology Co.; Yunfeng Capital from the house Alibaba; China Minsheng Trust Co. Ltd; China Oceanwide Holding Groug Co. Ltd; Hony Capital Fund; and CDH China HF Holdings Company Limited.
"Playtika's growth has been exceptional, and highlights its outstanding team, excellent corporate culture, cutting-edge big data analytics, and its unique ability to transform and grow games," said a Giant's founder and Chairman Shi Yuzhu in a statement to the press. "We are looking forward to Playtika continuing to innovate and excel."
The company was co-founded by CEO Robert Antokol. It received a $1.5 million funding prior to its acquisition by Caesar Interactive Entertainment Inc. (CIE) back in 2011 for around $80 million.
CFO Arik Sandler said the company will work independently despite the sale.
"We're not going to change anything at the team here in Israel or our other offices worldwide.
"We are in too early a stage to know, but I believe that we will need at some point a Chinese team," referring to China expansion and the localization of brands and games.
Sandler described the buyout a win-win situation for both sides. China is not like the U.S. or Israeli marker and forming partnership is an essential step in settling the differences and difficulties of entering the Chinese market.
"Playtika has been very strong in the western part of the world, with markets like the U.S., Canada, and Europe. We haven't tapped the Asian market on the whole and China specifically. The fact that we were bought by a Chinese games company gives us the opportunity to tap into the Chinese market. For the Chinese, they are mostly active in China, and this deal now gives them the chance to tap into the western part of the world.
"In China there are many app stores, owned by the carriers or independent. The market there is much more complex. For a western company like us is the challenge. Then there are the challenges of language, culture and regulations. So for a western company like us, it is very important that we have a Chinese partner."
Playtika has developed a number of social casino games for both smartphone and Facebook during the past 6 years. Their games on offer work as freemium games along with in-app purchases to get credits. Their current parent company, CIE, runs legal gambling under World Series of Poker (WSOP) and other brands, which CIE will retain following the acquisition deal.
According to Sandler, the aspect of bringing their mobile gaming infrastructure to China is a solid proposition. CIE is only selling the social gaming. Nevertheless, the company is not completely cutting their connection, saying "We will be able to use Caesar's brand in the future. We have an agreement with Caesars that we can license those brands.
"In general the world is going mobile and we are making more revenues via mobile platforms by comparison than web. We see the mobile penetration as an opportunity in China specifically and the world in general."