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FOR IMMEDIATE RELEASE

29 September 2021

Proposed sale of financial trading division ("Finalto") to Gopher Investments for US$250 million

Playtech plc ("Playtech" or "the Group") is pleased to announce that it has entered into an agreement for the sale of its financial trading division ("Finalto") to Gopher Investments ("Gopher" or the "Purchaser") for an enterprise value of US$250 million in cash (the "Transaction" or the "Disposal").

Key highlights

·      Disposal remains in line with stated strategy to simplify the Group and unlocks significant capital for Playtech

·      Conclusion of an extensive process, allowing Playtech to focus on its technology led offering as a pure play business in the high growth B2B and B2C gambling markets

·      Increases predictability and stability of cash flows for the remaining Group

·      Consideration comprises an all cash offer, payable on completion of the Transaction ("Completion"), with no contingent or deferred elements

Financial highlights and use of proceeds

·      Agreement to sell Finalto to Gopher for US$250 million, which represents an enterprise value to Adjusted EBITDA multiple of:

o  28x FY2019 Adjusted EBITDA and 7x FY2018 Adjusted EBITDA, being the last full years prior to 2020 which was impacted by the one-off COVID-19 benefit in Q1 2020

o  49x trailing twelve month period ended 30 June 2021 and 4x FY2020 Adjusted EBITDA

·      For the first half of the 2021 financial year, Finalto generated an adjusted EBITDA loss of US$0.6 million

·      Final consideration is subject to a completion accounts adjustment of up to US$25 million in either direction, which is determined by the financial performance of Finalto from 1 January 2021 to Completion ("Completion Adjustment"). The Completion Adjustment is intended to have the effect of transferring approximately US$109 million of regulatory capital with the business at Completion

·      As previously announced, a break fee of $8.8 million is payable to the Consortium upon completion of the Transaction

·      As at 30 June 2021, Playtech held US$110 million of cash relating to Finalto's regulatory and operating requirements ("Restricted Cash") on the Group's balance sheet. Further to transaction negotiations with Gopher, at Completion an amount of US$109 million is expected to be transferred with Finalto

o  The Disposal will result in net cash proceeds received at Completion from Gopher of US$132.2 million (being US$250 million less US$109 million and US$8.8 million), subject to any Completion Adjustments as outlined above

o  Net cash available to Playtech at Completion will increase by approximately US$242 million (being the US$250 million proceeds less the break fee, plus a further pro forma US$1 million Playtech will no longer need to hold as Restricted Cash), subject to any Completion Adjustments. This is in addition to the €40 million excess cash which was extracted during H1 2021

·      If the Transaction were to complete in the current trading environment, which remains uncertain due to the impact of the global pandemic, Playtech's intended use of proceeds would be to retain the consideration until there is clarity, and consequently reduce net debt in the interim

o  Should Playtech receive the funds in H1 2022 as expected, and on the assumption that there is greater clarity, Playtech remains committed to returning capital to shareholders when appropriate, whilst balancing the opportunities to invest in the business and taking a prudent approach to its capital structure and leverage

Further terms of the Transaction

·      Transaction subject to Playtech shareholder approval, with the Class 1 Circular (the "Circular") to be published as soon as practicable

·      Unanimously supported by the Playtech Board as being in the best interests of shareholders

·      Completion expected in H1 2022, assuming normal timetable for regulatory clearances

Mor Weizer, CEO of Playtech commented:

"We are very pleased to have successfully reached an agreement with Gopher regarding the sale of Finalto. This transaction delivers on our strategy to simplify the Group to focus on the high-growth B2B and B2C gambling markets.

"I would like to thank everyone at Finalto for their tremendous contributions to Playtech and wish them every success. We are pleased to recommend this transaction to our shareholders, and we remain well placed to capitalise on the exciting market opportunities ahead, driving sustainable growth for the benefit of all our stakeholders."

As a Class 1 Transaction the sale is conditional upon the approval of Playtech shareholders, as well as being conditional on the approval of certain regulatory authorities in respect of the change of control. A Circular will be posted as soon as practicable, including the timetable for a General Meeting. As reported in Playtech's half year 2021 results announced on 23 September 2021, Finalto has been classified as held for sale and reported in discontinued operations since 31 December 2020.

IMPORTANT NOTICE:

This announcement contains inside information as defined under the UK version of the Market Abuse Regulation (EU) No. 596/2014 which is part of UK law by virtue of the European Union (Withdrawal) Act 2018.

This announcement has been issued by, and is the sole responsibility of, Playtech.

The persons responsible for making this announcement are Chris McGinnis, Director of Investor Relations & Strategic Analysis, and James Newman, Director of Corporate Affairs.

Enquiries:

Playtech plc                                                                                                                            +44 (0) 1624 645 954

Chris McGinnis, Director of Investor Relations & Strategic Analysis

James Newman, Director of Corporate Affairs

UBS Investment Bank (Financial Adviser and Joint Sponsor to Playtech)                            +44 (0) 20 7567 8000

Rahul Luthra / Sandip Dhillon / Ben Crystal

Goodbody Stockbrokers (Corporate Broker and Joint Sponsor to Playtech)                        +353 1 667 0400

Piers Coombs / Charlotte Craigie / Stephen Kane

Headland (PR adviser to Playtech)                                                                                          +44 (0) 20 3805 4822

Lucy Legh / Stephen Malthouse / Jack Gault

Introduction

Further to its announcement on 18 August 2021 and termination of the SPA with the Consortium, Playtech is pleased to announce that it has entered into an agreement for the sale of its financial trading division to Gopher Investments.

The cash offer from Gopher represents an enterprise value of US$250 million. Approximately US$109 million of capital required to run the business will be transferred with Finalto as part of any sale.

As the Transaction constitutes a Class 1 Transaction under the Listing Rules it is conditional on the approval by Playtech shareholders, in addition to certain regulatory approvals. A Circular containing further details of the Transaction, together with a notice to convene a General Meeting, will be sent to shareholders as soon as practicable.

Background to and reasons for the Transaction

Playtech announced on 26 May 2021 that following an elongated sale process and expressions of interest from several parties, it had entered into a transaction with a consortium led by Barinboim Group and backed by Leumi Partners Limited and Menora Mivtachim Insurance Limited, together with key members of the Finalto Business' management team (together, the "Consortium").

The Company announced on 2 July 2021 that it had, subsequent to entering into a transaction with the Consortium, received an indicative non-binding conditional offer from Gopher to acquire Finalto for US$250 million. As the resolution for the transaction with the Consortium was not passed at the adjourned meeting on 18 August 2021, and as announced on the same day, the Consortium agreed with Playtech to terminate the SPA which allowed Playtech to immediately engage with Gopher to progress a potential disposal of Finalto. Due diligence and negotiations with Gopher since this date have resulted in the binding agreement to acquire Finalto on the terms as set out in this announcement.

The Board has unanimously concluded that the agreement reached with Gopher should be recommended to shareholders and that shareholders vote in favour of the Transaction at the General Meeting.

The Board has, throughout the sale process, carefully evaluated all proposals which it has received, taking into account the prices which potential purchasers have proposed, the basis on which those prices have been reached, potential purchasers' knowledge and understanding of the business, particularly in light of its regulated status in multiple global jurisdictions, and the potential to provide a "clean break" for Playtech.

The Board believes the Transaction represents a good outcome for all other stakeholders, and continues to offer the opportunity to realise an attractive value for the Finalto Business, achieve significant progress in the Company's strategic aim of simplifying the Group, and release significant capital from a non-core asset.

Shareholder Support

Playtech has received an irrevocable undertaking subject to certain exceptions to vote in favour of the Disposal at the General Meeting from Gopher Investments representing, in aggregate, approximately 4.97 per cent. of Playtech's issued share capital at close of business on 28 September 2021 (being the Business Day prior to the date of this Announcement).

About Gopher Investments and TTB Bond Partners

The Purchaser is a 4.97% shareholder in Playtech and an affiliated entity of TT Bond Partners ("TTB").

The Company understands that the Purchaser's acquisition of Finalto will be financed from committed third party funds which will be immediately available.

The Purchaser will be supported from a management perspective by members of the Finalto Business' management team who will transfer with the Finalto Business, including Ron Hoffman (Chief Executive Officer of the Finalto Business) and Liron Greenbaum (Chief Operating Officer of the Finalto Business).

TTB, through its Hong Kong regulated entity, TTB Partners Limited, which is advising the Purchaser on this transaction, is an investment and advisory firm based in Hong Kong, whose founders and professionals have over 30 years' experience in the financial services industry investing and advising on over $250 billion of transactions in the US, Europe, and Asia.

About Finalto

Finalto is a specialist in B2C and B2B multi-channel trading software and services.

The Finalto Business' B2C offering, operating the brand Markets.com, is an established online contracts for difference ("CFDs") broker where customers can trade shares, indices, currency and commodity CFDs rapidly and securely on its trading platforms.

The Finalto Business' B2B offering consists of:

a)    clearing and execution services for other retail brokers and professional clients, through Finalto Financial Services Limited (formerly CFH Clearing Limited), where the Finalto Business acts as a matched-principal liquidity provider and straight through processes the trades to prime brokers and clearing houses;

b)    clearing and execution for other retail brokers, where the Finalto Business acts as the execution venue and market-maker; and

c)     technology and risk management services, where the Finalto Business provides platform, client relationship management, reporting and risk-management technology to the retail broker market.

Where the Finalto Business acts as the execution venue, or provides execution services, these activities are undertaken by Finalto and its subsidiary undertakings (the "Finalto Group") regulated by the FCA, the Monetary Authority of Singapore, the Cyprus Securities and Exchange Commission, the British Virgin Islands' Financial Services Commission, the Australian Securities & Investments Commission and the South African Financial Sector Conduct Authority.

In the financial year ended 31 December 2020, the Finalto Business generated revenues of €121.8 million, adjusted EBITDA of €56.4 million (US$63.9 million) (split between H1 2020 and H2 2020 of €52.8 million and €3.6 million respectively). As outlined in Playtech's 2020 full year results announced on 11 March 2021, the Finalto Business had an unprecedented performance in 2020 as it benefited from exceptional increases in market volatility, particularly in H1. Market activity began to normalise towards the end of the first half of 2020 and this trend largely continued throughout the remainder of 2020. This led to a modest performance from the Finalto Business in H2 compared to H1 2020, a trend which has continued into 2021.

The Finalto Business was classified as a discontinued operation in the full year 2020 results, and the Group also recognised an impairment charge of €221.3 million in relation to Finalto.

As outlined in Playtech's 2021 half year results announced on 23 September 2021, market conditions normalised in H1 2021. For the first half of the 2021 financial year, Finalto generated revenues of €31.9 million and adjusted EBITDA loss of €0.4 million (US$0.6 million). As at 30 June 2021, the gross assets of Finalto were €480.1 million.

Further financial information will be set out in the Class 1 Circular to be posted to shareholders in due course.

Ron Hoffman (Chief Executive Officer of the Finalto Business) and Liron Greenbaum (Chief Operations Officer of the Finalto Business) are deemed to be key individuals to Finalto.

Key terms of the Transaction

Under the sale and purchase agreement, Playtech has agreed to sell Finalto to the Purchaser for cash consideration of US$250 million, with the Transaction structured as a sale of Finalto's outstanding shares and loans.

The total consideration payable to Playtech under the sale and purchase agreement is structured as follows: (i) US$250 million payable in cash on Completion; and (ii) a daily amount of US$24,000 in respect of each day in the period commencing on 28 March 2022 and ending on the day before Completion, save that, if Completion occurs before 28 March 2022, no such additional consideration will be payable to Playtech.

It is expected that approximately US$109 million of capital required to run the Finalto Business will be transferred with Finalto on Completion. The Completion Adjustment is dependent on the financial performance of Finalto from 1 January 2021 up to Completion:

·      Where Finalto generates profits which have the effect of increasing regulatory capital or excess cash, Playtech will withdraw an amount of up to US$25 million from Finalto, immediately prior to Completion, on a dollar for dollar basis; or

·      Where Finalto generates losses which have the effect of reducing regulatory capital, or create a deficit in cash requirements, Playtech will inject an amount of up to US$25 million into Finalto, immediately prior to Completion, on a dollar for dollar basis

Completion of the sale and purchase agreement is conditional on (i) the approval of the Transaction by Playtech shareholders and (ii) receipt of the consent of certain regulatory authorities to the change of control of the relevant members of the Finalto Group. The sale and purchase agreement will terminate if the above conditions are not met or waived by 29 June 2022, which date may be extended by Playtech by up to three months or otherwise by agreement between Playtech and the Purchaser.

Playtech has given limited warranties (relating to title, authority, capacity and solvency) in favour of the Purchaser under the sale and purchase agreement and will also provide an indemnity on Completion in respect of certain claims and potential claims related to the Finalto Group on broadly similar terms as those provided to the Consortium.

The Purchaser has paid a deposit of US$10 million as security for the Purchaser's obligations under the sale and purchase agreement (the "Deposit"). The Deposit will be paid to Playtech on the earlier of Completion and the termination of the sale and purchase agreement in accordance with its terms, other than where such termination is due to certain factors, which include but are not limited to the resolution not being passed at the General Meeting in respect of the Transaction (and the Purchaser has complied with its obligations in respect thereof). The Purchaser may deposit an additional US$4 million to extend by an additional 20 business days the date by which it is required to make the applications, submissions, notifications and filings required under the sale and purchase agreement.

If the sale and purchase agreement terminates because the resolution was not passed at the General Meeting and, within 12 months following such termination, an exit event in respect of the Finalto Group by Playtech occurs that values the Finalto Group at an enterprise value in excess of US$240 million, Playtech will pay to the Purchaser US$8.8 million.

Transaction approvals and expected timetable to Completion

The Transaction is subject to the satisfaction of a certain conditions, including the approval of the disposal by Playtech shareholders at a General Meeting, and receipt of consent of certain regulatory authorities to the change of control of the relevant members of the Finalto Group.

A Circular containing further details of the Transaction, together with a notice to convene a General Meeting, will be sent to Playtech shareholders as soon as practicable. Completion of the Transaction is expected in H1 2022.

About Playtech

Founded in 1999 and premium listed on the Main Market of the London Stock Exchange, Playtech is a market leader in the gambling and financial trading industries with over 7,000 employees across 24 countries.

Playtech is the gambling industry's leading technology company delivering business intelligence driven gambling software, services, content and platform technology across the industry's most popular product verticals, including, casino, live casino, sports betting, virtual sports, bingo and poker. It is the pioneer of omni-channel gambling technology through its integrated platform technology, Playtech ONE. Playtech ONE delivers data driven marketing expertise, single wallet functionality, CRM and responsible gambling solutions across one single platform across product verticals and across retail and online.

Playtech partners with and invests in the leading brands in regulated and newly regulated markets to deliver its data driven gambling technology across the retail and online value chain. Playtech provides its technology on a B2B basis to the industry's leading retail and online operators, land-based casino groups and government sponsored entities such as lotteries. Playtech directly owns and operates Snaitech, the leading sports betting and gaming company in online and retail in Italy.

No offer or solicitation:

This announcement is for information purposes only and is not intended to and does not constitute or form part of any offer or invitation to purchase, acquire, subscribe for, sell, dispose of or issue, or any solicitation to purchase, acquire, subscribe for, sell, dispose of or issue any securities in Playtech in any jurisdiction.

Overseas jurisdictions:

The release, publication or distribution of this announcement in certain jurisdictions may be restricted by law. Persons who are not resident in the United Kingdom or who are subject to the laws of other jurisdictions should inform themselves of, and observe, any applicable restrictions or requirements. Any failure to comply with these restrictions may constitute a violation of securities laws of any such jurisdictions. To the fullest extent permitted by law, Playtech disclaims all and any responsibility or liability for the violation of such restrictions by such person.

Cautionary note regarding forward looking statements:

This announcement contains certain forward looking statements with respect to the financial condition, results of operations and businesses of Playtech, the Group and Finalto and certain plans and objectives of Playtech. All statements other than statements of historical fact are, or may be deemed to be, forward looking statements. Forward looking statements are statements of future expectations that are based on management's current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements.

Statements containing the words "intends", "aims", "anticipates", "assumes", "budgets", "could", "contemplates", "continues", "plans", "predicts", "projects", "schedules", "seeks", "shall", "should", "targets", "would", "believes", "anticipates", "may", "will", "estimates" "expects" and "outlook" or, in each case, their negative or other variations, or words of similar meaning are forward looking.

Each forward looking statement speaks only as of the date of the particular statement. Playtech does not undertake any obligation publicly to update or revise any forward-looking statement as a result of new information, future events or other information, although such forward-looking statements will be publicly updated if required by the Financial Conduct Authority of the United Kingdom, the London Stock Exchange plc or by applicable law. Given these statements involve risks and uncertainties, results could differ materially from those expressed, implied or inferred from the forward looking statements contained in this announcement.

Financial information:

References to historic financial information of Playtech or the Finalto Group in this announcement have been extracted without adjustment from the relevant published audited financial information of Playtech (which applied the prevailing foreign exchange rate at the relevant time) save for the references to the financial performance of the Finalto Group in respect of the twelve month period ending 30 June 2021 which has been extracted without adjustment from Playtech's latest management accounts.

No profit forecast:

Unless otherwise stated, no statement in this announcement is intended as a profit forecast or a profit estimate for any period and no statement in this announcement should be interpreted to mean that earnings, earnings per share of Playtech, income or cash flow for Playtech, the Group or Finalto (as appropriate) for the current or future financial years would necessarily match or exceed the historical published earnings, earnings per share of Playtech, income or cash flow for Playtech, the Group or Finalto (as appropriate).

Rounding:

Certain figures included in this announcement have been rounded. Accordingly, figures shown for the same category may vary slightly and figures shown as totals may not be an arithmetic aggregation of the figures that precede them.

UBS AG London Branch is authorised and regulated by the Financial Market Supervisory Authority in Switzerland. It is authorised by the Prudential Regulation Authority and subject to regulation by the Financial Conduct Authority and limited regulation by the Prudential Regulation Authority in the United Kingdom. UBS AG London Branch is acting exclusively as financial adviser to Playtech plc and no one else in connection with the process. In connection with such matters, UBS AG London Branch will not regard any other person as its client, nor will it be responsible to any other person for providing the protections afforded to its clients or for providing advice in relation to the process, the contents of this announcement or any other matter referred to herein.

Goodbody is authorised and regulated by the Central Bank of Ireland, and is also subject to regulation by the Financial Conduct Authority. Goodbody is acting exclusively for Playtech and for no one else in connection with the process and will not regard any other person (whether or not a recipient of this announcement) as a client in relation to the process or any other matter referred to in this announcement and will not be responsible to anyone other than Playtech for providing the protections afforded to its clients or for giving advice in relation to the process or any other matter referred to in this Announcement.