Gaming and retail broking giant Playtech has just ventured deeper into the financial space. The company, whose biggest shareholder is Israeli billionaire Teddy Sagi, has just announced that it is purchasing CFH Group for $120 million.
The news comes as a surprise to the industry, since up until now Playtech has been focused on retail financial trading. By purchasing CFH Group, the company is taking a turn in whole new direction.
Last year the company unsuccessfully attempted to purchase retail brokers AvaTrade and Plus500. The deals were both scrapped after both the Bank of Ireland and the U.K. Financial Conduct Authority denied approval.
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The deal has already been approved by the FCA with the change of control process of CFH Group. The company’s financials division is starting to implement the transition plans immediately.
Playtech states in its announcement that it has already developed a B2B offering within its financials division. Playtech is committed to continuing the development and the offering of a fully Straight Through Processing (STP) brokerage model that is sending client trades onto the broader market. Retail broker clients of Playtech (CFH Group) are going to get multi-asset execution, prime brokerage services, liquidity and risk management tools.
According to the official announcement, CFH’s revenue and adjusted EBITDA for the year ended 31 December 2015 was $19.2 million (€17.6m) and $5.7 million (€5.2m) respectively. The company’s annual revenue run rate was $29.0m (€26.6 million), owing to an increase in trading volumes from continuing organic growth of client acquisition and the business as a whole.