Aristocrat acquires social gaming brand Plarium for $500m

Paterniano Del Favero
Agosto 10, 2017

On Thursday, Australia's Aristocrat Digital announced that it was purchasing Israeli gaming start-up Plarium for $500 million in cash.

The company's most popular game, Vikings: War of Clans, has been one of the highest grossing strategy games in key markets across the world since its launch. The company is headquartered in Herzliya Pituah and operates eight offices and studios throughout Europe and the US.

Plarium has nine key titles including Terminator, Soldiers Inc and Sparta: War of Empires, and a pipeline of future releases. Plarium's games are free to play, but certain features are available for players to buy. "The acquisition of Plarium increases our pro forma digital revenue contribution from 14 percent to 22 percent for the year ended 31 March 2017", 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".

In a statement confirming the deal, Aristocrat said that the acquisition will help to "significantly expand" its digital addressable market into "adjacent gaming segments". "It also provides us a stronger platform to target the US$43.6 billion overall mobile and web games market as growth segments".

At the time of writing the gaming solutions company?s shares are up 5% to $21.86.

The company had been eyeing Israeli companies "given there's a lot of talent and innovation coming out of Israel". The launching pads are created to allow start-ups opportunities to network and move their ideas into successful businesses.

CEO and co-founder of Plarium, Avraham Shalel, said Aristocrat was "an ideal partner for us given our common aspiration to be a global leader in social gaming".

Plarium CEO and cofounder Avraham Shalel will continue to lead Plarium after the acquisition.

Another bonus in my opinion is that Plarium's existing management team have agreed to remain in their current positions until at least 2020.

The deal is due to be completed by December 2017.

The acquisition is expected to be accretive to earnings in year one.

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