? Public Offering
Israel-based mobile social games developer and publisher Playtika (NASDAQ: PLTK) raised $1.88B through the IPO on NASDAQ at a price of $27 per share, above its target range of $22-24
On the first day of trading, prices went up to $31.62 per share (+30%), which eventually led to the market cap of $13.5B. Trading multiples based on LTM ended Sep’2020 are ~7x EV/Revenue and ~19x EV/EBITDA, assuming a current EV of $15B
Of the total 69.5m shares, 51m ($1.4B) shares were offered by the actual majority shareholder, and 18.5m ($0.5B) shares were offered by Playtika
After the completion of the public offering, Playtika will continue to be a ‘’controlled company with about” 80% of voting power belonging to a Chinese investor, Yuzhu Shi
? Financial Highlights
Playtika is a profitable and rapidly growing business demonstrating ~$2.3B LTM Revenue, ~$0.8B adj. EBITDA (~36% margin) with revenue CAGR of 21% over 2015—LTM 2020 period
Playtika’s top nine game collectively represent over 95% of total revenue
~80% of the company’s revenue belongs to mobile platform vs. 20% coming from web
Playtika heavily relies on in-app purchases, which account for over 95% of total revenue
Over 75% of revenue is generated in North America, and 13% — in Europe
Playtika is a highly leveraged business with $2.2B long-term debt (as of Sep-30, 2020), which primarily is the result of huge dividend distribution to stockholders of $0.4B for 2018 and $2.4B for 2019 that was fully financed by the bridge loan facility
? Business Highlights
57% of revenues generated by casino-themed games and 43% by casual games
35.2 million average MAUs and 11.4 million average DAUs
80% of revenue generated by mobile platform and 20% by web
98% of revenue generated by the company’s top nine games
97% of revenue generated by in-app purchases
* for the nine months ended Sep’2020
? Previous Acquisitions
Playtika has strong inorganic growth strategy, primarily expanding its game portfolio through acquisitions, which has been the key driver of revenue ($1.4B out of $2.3B) and profitability. So far, Playtika has acquired 7 game studios and 7 of the top-nine company’s games are owned by the acquired studios
The company explains such success by Playtika Boost Platform, which provides live-ops services and technologies to newly acquired studios increasing their profitability and revenue scale
In fact, Playtika’s operating cash flow during 2017-2019 accounted for $1.3B, meaning that Playtika has no need to use external financing to perform its M&As, fully financing all its deals from existing operating cash
In August 2019, Playtika acquired a Finland-based studio Seriously, a mobile game developer behind a puzzle game Best Fiends, for up to $351.2m: including:
an up-front consideration of $281.2m
up to $70m of an earn-out consideration, based on studio’s performance during 2020.
In January 2019, the company acquired Austria-based mobile solitaire games developer Supertreat, for up to $200m, including:
an up-front consideration of $90m;
up to $110m of an earn-out consideration, based on studio’s performance during the twelve-month period after the acquisition.
In November 2018, Playtika acquired Germany-based mobile puzzle games developer Wooga, for $204.1m
In October 2017, the company acquired Israel-based social games developer Jelly Button, for an undisclosed sum, that is said to be “tens of millions of dollars”
Also, the company has expanded its game portfolio by acquiring games, such as House of Fun (2014), World Series of Poker (2013), and Bingo Blitz (2012), during the last several years
? Product
Playtika is known for developing and publishing of social casino, puzzle, poker, and solitaire mobile and web games. The top nine company’s games include:
Launched in 2010, Slotomania is #1 worldwide social slots game , which has attracted over 1.5 million DAU in Q3’20
Launched in 2010 and acquired by Playtika in 2012, Bingo Blitz is #1 worldwide mobile bingo game with 0.9 million DAU in Q3’20
Launched in 2014 and acquired in 2019, Best Fiends is a match-3 mobile game with RPG elements having +1.3 million DAU in Q3’20
Launched in 2017 and acquired in 2019, Solitaire Grand Harvest is #1 worldwide mobile solitaire game
Launched in 2017 and acquired in 2018, June’s Journey is #1 worldwide mobile hidden objects game
Other games of the company include Board Kings, World Series of Poker (#1 poker game), Caesars Slots, and House of Fun
During the nine-month period ended on September 30, 2020, Playtika had over 11 million DAUs
