Aristocrat buys Israeli online gaming company Plarium

Business News

Aristocrat Leisure shares have jumped around five per cent in opening trade, after the gaming machine maker and provider said it is buying Israel-based social gaming company Plarium Global for $500 million.

At 1015 AEST, Aristocrat shares were trading at $21.81, up 4.9 per cent, after earlier lifting to $21.90.

The company says the acquisition of the Israel-based business increases its overall exposure to the fast growing digital market with pro forma Aristocrat Digital revenue contribution increasing from 14 per cent to 22 per cent.

Plarium is a privately owned free-to-play mobile, social and web-based game developer headquartered in Herzliya, Israel, with multiple offices throughout Europe, Israel and the US, and more than 1,200 employees across five genre-specific studios, Aristocrat said in a statement on Thursday.

Plarium CEO and cofounder Avraham Shalel will continue to lead Plarium after the acquisition. Shalel and 12 other key members of Plarium’s management team have agreed to stay at the company and to defer part of the payments due them until 2020.

Shalel said, “I am very proud of the success we have achieved since establishing the business in 2009. The hard work and efforts of Plarium’s employees have positioned Plarium as a world class mobile game publisher. Aristocrat is an ideal partner for us given our common aspiration to be a global leader in social gaming, which will be accelerated through leveraging Aristocrat’s financial, strategic and operational resources.”

Aristocrat CEO and managing director Trevor Croker said, “The acquisition of Plarium allows Aristocrat to expand our addressable market into logical adjacent segments in the fast growing mobile social 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, Casual and RPG segments. It also provides us a stronger platform to target the US$43.6 billion overall mobile and web games market as growth segments.”

The deal is due to be completed by December 2017.