Aristocrat Leisure Likely to Consider Sizable Acquisitions, Says Fitch Ratings

Apparently non chastened past the collapse of its attempted takeover of Playtech, Aristocrat Leisure is likely to remain a player in large-scale mergers and acquisitions, says Fitch Ratings.

Last year, the Aboriginal Australian gaming gimmick whale attempted to gain Playtech for $2.84 billion, but that elbow grease encountered headwinds, including competing bids from other suitors and, ultimately, Aristocrats inability to convince 75% of Playtech investors to O.K. the deal. Undaunted, Aristocrat could once again take back to hunting for takeover targets.

Fitch expects Aristocrat  to keep to pursue strategical M&A, in particular in the real-money gaming (RMG) sector, precondition its warm financial flexibility, strong portfolio of one-armed bandit content, and its lapsed acquisition of Playtech (B2B online supplier),” says the ratings agency.

The search firm, which rates the gaming society “BBB-“, says the one-armed bandit machine manufacturer’s course credit profile “has headroom for M&A” and that acquisitions could follow funded in that forge owing to the company’s strong deferred payment position.

Aristocrat Acquisitions Likely to Be Digital

Aristocrat is the leading provider of slot machines inward its place country and is a upside troika provider North America. It has 20% securities industry share inward the US and higher pct for premium gaming machines.

With control in the land-based one-armed bandit market place established, it’s potential that if Aristocrat pursues acquisition opportunities, it will follow on the digital front. That was the allurement of Playtech, a gaming software program company.

Data reassert Aristocrat’s digital business sector is growing and much of that growth is attributable to previous rounds of deal-making.

“Aristocrat’s digital stage business has grown meaningfully through both M&A and laboured investments inwards unexampled content,” adds Fitch. “Aristocrat’s previous acquisitions of Plarium and Big Fish increased ALL’s digital business organisation from 16% of total revenue inward 2017 to 40% at YE 2019. Fitch believes there are modified synergies into Aristocrat’s land-based segment, but its Digital products provides intelligent diversification to its magnetic core slot business organisation (as evidenced during the pandemic).”

Potential Targets

Fitch doesn’t hypothesise as to what companies could be on Aristocrat’s shopping name in the wake of the collapsed Playtech bid, nor does the search steadfastly ballpark possible toll tags the suitor would consider.

However, the Aussie fellowship has $933 trillion inward inordinateness cash in that was reserved for the Playtech takeover, memory access to a $500 jillion credit entry revolver and $2.87 one thousand million in boilersuit cash.

In the $2 1000000000000 to $4 1000000000000 price range, Aristocrat could potentially acquire its custody on any number of makers of engineering for internet casinos, web-based salamander rooms, and online sports wagering as intimately as gaming studious and societal casinos.

“Free immediate payment flow perimeter is also forecasted to remain robust, ranging from mid- to high-single digits pct of revenue. Fitch expects a small amount of debt paydown relative to ALL’s excess cash balances, with additional allocation toward dividends and tuck-in M&A,” concludes Fitch.

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