Australian Aristocrat Buys Israeli Social-Gaming Company Plarium for $500 Million

Australian company Aristocrat said that Herzliya based Plarium is an ideal partner in its quest to be a global leader in social gaming.

 

Australian company Aristocrat Leisure Ltd. announced that it will buy Israeli social gaming developer Plarium Global for $500 million cash, a move that will increase the company’s exposure to the fast-growing digital market.

Co-Founded in 2009 by 7 friends, Plarium has over 1,200 employees worldwide and offices in Europe and the US. The Israeli company, based in Herzliya, has nine key titles that are currently monetizing and a strong game pipeline. Plarium’s most popular game to date, ‘Vikings: War of Clans’, has repeatedly ranked in the top 10 grossing strategy games since its launch.

Plarium CEO with co-founder Avi 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.

The deal comes after Aristocrat bought social-casino operator Product Madness in 2012. The deal with Plarium which also includes an earn-out arrangement payable to Plarium shareholders will increase Aristocrat’s mark to 22 per cent from 14 per cent of revenue.

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.

Israeli gaming industry is no doubt has become a global powerhouse in the category. Israel has “a few major players and hundreds of workers” in gaming apps. Some of the big ones are Playtika (was sold for $4.5 billion), FuntactixTabTale,  Plarium Side-Kick and Sixense.

Deutsche Bank is acting as financial advisor to Plarium and Goldfarb Seligman are legal advisors to Plarium. Citi is acting as the sole financial adviser to Aristocrat, and Allens and Herzog Fox & Neeman are its legal advisors.

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