Australia-listed slot machine maker and online gaming content provider Aristocrat Leisure Ltd has announced the sale of social gaming company Plarium Global Ltd for a “fixed consideration” of US$620 million. There is also the possibility of Aristocrat Leisure receiving a post-sale “contingent consideration” of up to US$200 million, depending on the asset’s performance.
The buyer is Sweden-based Modern Times Group, an international group involved in mobile gaming.
Aristocrat Leisure said the proceeds from the transaction would “be deployed to fund Aristocrat’s longer term growth strategy in line with its capital allocation framework”.
Aristocrat Leisure has three operating divisions: Aristocrat Gaming, the group’s land-based gaming technology segment; Aristocrat Interactive, the firm’s segment focused on online real money gaming (RMG); and mobile games division Pixel United.
The sale of Plarium – coming after a strategic review of Aristocrat’s business, announced earlier this year – will be done via Pixel United Holdings Ltd, stated the parent company.
It is expected the transaction will be completed in the first half of 2025, said the announcement.
Modern Times will provide a fixed consideration of US$620 million, with US$600 million of it payable at the time the deal is closed, and the remaining US$20 million deferred to April 2026.
The contingent consideration of up to US$200 million is “subject to the achievement of certain financial targets over calendar years 2025 to 2028,” said Aristocrat Leisure.
Brokerage JP Morgan Securities Australia Ltd said in a Tuesday memo that the “best asset” within Pixel “was undoubtedly Plarium”.
“Therefore, the overall price to sell Pixel’s social casual businesses may appear lower than expected with a break-apart valuation,” wrote JP Morgan analysts Don Carducci and Michael James.
“We do not have any sale, proceeds in our numbers currently, but have previously estimated potential overall sale proceeds of circa US$1,300 million for all of the social casual assets,” they added.
Aristocrat Leisure said the sale of Plarium was an “important milestone”, as the group “focuses on growth across its regulated gaming strength in core land-based gaming, real money gaming and social casino opportunities”.
Plarium was acquired for US$500 million in October 2017 by the Australian group, and had “generated an internal rate of return in the mid-teens during the period of Aristocrat’s ownership,” observed the gaming supplier.
The update cited Aristocrat Leisure’s chief executive and managing director, Trevor Croker, as saying: “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.”
“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,” stated the CEO.
He added: “Our ownership of Plarium has helped to drive Aristocrat’s digital transformation, extending our track record of successfully acquiring businesses to accelerate our strategy.”
In Tuesday’s update, Aristocrat Leisure said the strategic review of “Big Fish Games, excluding the Big Fish Social Casino assets, remains ongoing”. The firm said it “continues to actively engage with third parties and assess all options”.
The company also said it “intends to take a goodwill impairment charge of approximately US$110 million” in its financial year 2024 result, in relation to Big Fish Games, excluding the Big Fish Social Casino assets.
