Currency trading platform Ava Trade is set to be acquired by Playtech Plc for a fee of $105 million.
Playtech, an industry leader in sports betting and online casino software, has been investing heavily in the currency trading industry as it attempts to diversify its operations with the gambling industry coming under increased pressure from new regulations and higher taxation.
In April 2015, Playtech acquired TradeFX in a €208 million deal and it is via this subsidiary that the Ava Trade purchase will be made. While TradeFX is trading platform and payment services provider, Ava Trade is a contract-for-difference (CFD) broker that allows buyers to trade on movements in a market price without actually owning the asset in question.
Speaking of the transaction, Mor Weizer, Chief Executive Officer of Playtech, said:
“The acquisition of the Ava Group is another important milestone in Playtech's strategy to expand and enhance its overall technology offering through multiple vertical markets. Since the recent earnings-enhancing acquisition of TradeFX and the creation of our financials division we have sought further opportunities to broaden our reach into this vertical.
The Ava Group is a well recognised and established online CFD broker with multiple regulatory licences and a strong customer base with insignificant geographical overlap with the TradeFX Group. We are very excited about the opportunities for the Group arising from the combination of the Trade FX Group and the Ava Group which we are confident will deliver long term value for Shareholders.”
In February 2015, Playtech agreed to purchase Plus500 – another CFD company — for £460 million.
Investors in Playtech reacted positively to the news and shares quickly rose 1.4% to 829.5p on Wednesday afternoon. Shares in Playtech are now trading at 854p per share giving Playtech a market capitalization of £2.671 billion.