Australian slot manufacturing giant Aristocrat Leisure Limited has entered into a binding agreement to acquire 100 percent of Israeli social gaming developer Plarium Global Limited at a cost of US0 million.
The acquisition follows a similar move for social casino company Product Madness in 2012, and will see the percentage of annual revenue generated from Aristocrat’s digital sector rise from 14 percent to 22 percent.
Plarium is a privately owned free-to-play mobile, social and web-based game developer based in Israel with 1,200 employees spread across five studios and offices in Israel, Europe and the U.S. It has nine key monetized titles, led by “Vikings: War of Clans,” which is regularly ranked among the world’s top 10 grossing strategy games.
CEO and co-founder of Avraham Shalel will continue to lead Plarium after the acquisition, which is expected to be completed by December.
“Aristocrat has continued to deliver significant growth and outstanding results in our digital social casino business,” said Aristocrat CEO and Managing Director Trevor Croker.
“The acquisition of Plarium allows Aristocrat to expand our addressable market into logical adjacent segments in the fast-growing mobile gaming market. This immediately expands our addressable market from US$3.2 billion in the social casino segment to US$25.4 billion when including the strategy, RPG and casual segments. It also provides us with a stronger platform to target the US$43.6 billion overall mobile and web games market as growth segments.
“The strategic and financial benefits are compelling for Aristocrat shareholders. Following the acquisition of Product Madness in 2012, Aristocrat’s Digital Division experienced exceptional growth, and Product Madness is now a top-five social casino gaming publisher globally. Plarium provides a unique opportunity to continue and accelerate this growth by diversifying into attractive new mobile gaming segments, including strategy, RPG and casual.
“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. We look forward to working with and supporting the continued success of the Plarium team.”
The acquisition includes an earn-out arrangement payable to Plarium shareholders following the end of calendar years 2017 and 2018 respectively.
