Playtika Paying acquires Redecor App Parent Reworks for $600M

Playtika Paying acquires Redecor App Parent Reworks for $600M

Israeli company, Playtika, listed on NASDAQ under the symbol “PLTK” has acquired Finland-based Reworks, the creator of Redecor App for $600 million. This acquisition will enable Playttika to venture beyond the gaming space.

Terms of the agreement

Playtika is paying $400 million in cash in return for acquiring 80% of Reworks. The balance of $200 million for 20% of Reworks is based on Rework’s target earnings before interest, taxes, depreciation, and amortization (EBITDA) in 2022 and if earnings before interest, taxes, depreciation, and amortization (EBITDA) target in 2022 cannot be achieved, it will acquire 20% of Reworks at a consideration of $1.

Not a natural fit?

Playtika, the company behind games such as Slotomania and other mobile casino games has acquired the Redecor app in which players decorate homes and this may not at first seem like a natural fit. However, the company sees large potential in Reworks and Redecor App because Redecor is the second largest design app and has a market that is potentially large for in-app purchases. A statement by both companies stated that considering that the revenue in the design entertainment category with respect to in-app purchases has grown by 33% growth (compounded) annually since 2019 and home décor sales are about 12% of the e-commerce sales in the United States and home décor is one of the most popular categories on Pinterest and home décor as a category returns more than 100 million Instagram posts, the acquisition is potentially expected to generate huge returns.

Different but sensible acquisition?

Playtika became a public company and listed on the NASDAQ in January 2021 and is the developer of games like Ceaser Slots, World Series Poker (WSOP), Slotomania, and Bingo Blitz. Acquiring Reworks makes considerable business sense because players of the games of Playtika (36 million users) and Reworks share similar demographic traits. Playtika’s revenue after acquisition in 2021 is expected to increase by $30 million.

More deals for Playtika?

The Company that built 9 out of the top 100 highest-grossing games in app stores could enhance its already-dominant position in the market through the acquisition. The acquisition of Reworks is Playtika’s eighth and largest acquisition. As the gaming industry undergoes a phase of consolidation, the company is expected to acquire more targets in order to solidify its position in the industry.

About sherlock

Sherlock Gomes loves to write and express his views on anything related to Gaming, Gambling, & Casino. He has been covering Gaming for more than two years now.