Playtech and Caliplay Enter New Partnership to Settle Disputes and Drive Growth

Playtech has reached a pivotal agreement with Grupo Caliente, resolving long-standing commercial disputes related to their t venture, Caliplay, in Mexico. This revised deal not only settles the disagreements but also positions Playtech to further solidify its presence in the Latin American market through a significant equity stake in a new U.S.-incorporated holding company, Cali Interactive.

Under the of this strategic agreement, Playtech now holds a 30.8% equity share in Cali Interactive, which will oversee Caliplay’s operations. Additionally, Playtech will appoint a director to the board of the newly formed company and will be entitled to dividends along with other shareholders. The new agreement also extends Playtech’s B2B software license and services contract with Caliplay for another eight years, reinforcing the companies’ collaboration in the region.

Cali Interactive will also pay Playtech $140 million in cash over four years as part of the new arrangement. This renewed partnership is expected to drive substantial growth for both parties, particularly as they look to capitalize on opportunities beyond Mexico.

Settlement of Legal Disputes and Financial Reconciliation

The revised deal has also put an end to the legal battles between the companies, which had been embroiled in a dispute over alleged unpaid fees. Both Playtech and Caliplay had filed lawsuits claiming contractual breaches, but with this new agreement in place, all ongoing legal proceedings have been paused and will be dismissed once the deal is finalized in early 2025, subject to Mexican antitrust approval.

As part of the reconciliation, Caliplay has resumed paying its outstanding software and service fees to Playtech, with more than 80% of the total owed—amounting to over $166 million—already cleared. The remaining balance is held in escrow and is expected to be fully paid by the end of 2025 or upon the closure of the new arrangement.

Playtech’s CEO, Mor Weizer, expressed optimism about the renewed partnership, stating: “During the past nine years, we have worked closely with Caliplay to create a successful and rapidly growing digital business in Mexico. The revised arrangements mark the beginning of an exciting new chapter that will build on the impressive progress to date, with a view to driving significant further growth for Cali Interactive in the future.”

Strengthening of Strategic Partnership for Future Growth

Caliplay’s Chairman, Emilio Hank, also underscored the importance of the partnership, emphasizing that it reflects the deep strategic alignment between the two companies. He added, “We are focused on growing Caliplay, leveraging our core strengths and Playtech’s leading technology to broaden our geographical footprint as we continue our mission to provide the best gaming experiences to our customers in Mexico and beyond.”

Playtech’s strong foothold in the Mexican market, coupled with its exposure to other fast-growing regions in the Americas and Europe, has laid the groundwork for future growth. The company’s proprietary technology has been a driving force behind its success in the region, and the continuation of the B2B software agreement solidifies Playtech’s long-term presence.

Positive Impact on Playtech’s Financial Performance

In light of this development, Playtech’s financial outlook has also improved. The company raised its 2024 EBITDA guidance due to strong performance in the first half of the year, particularly in its B2B division. The robust growth in the Americas, as well as improved cost management, contributed to this upward revision.

Additionally, following the announcement of the new agreement, Playtech’s shares surged, rising by over 12% in the stock market, reflecting investor confidence in the company’s future trajectory. The collaboration with Caliplay, along with other strategic initiatives in the U.S. and Canada, positions Playtech for further success in the coming years.

Source:

“Playtech and Caliplay reach strategic agreement“, sbcamericas.com, September 16, 2024