Chinese Group Buys Israel-Based Online-Games Firm

SHANGHAI—A Chinese consortium led by Shanghai Giant Network Technology Co. and joined by a private-equity arm set up by Alibaba's Jack Ma, agreed to purchase an Israeli games business for $4.4 billion in cash.

The consortium of 11 investors will purchase a 100% stake in Caesars Interactive Entertainment's subsidiaries, including mobile-games unit Playtika.

Caesars Interactive Entertainment has developed casino-style games including "Caesars Casino," "Bingo Blitz" and "World Series of Poker."

The deal doesn't include "World Series of Poker" and CIE's real-money online gaming business. CIE is a subsidiary under a joint venture between Caesars Acquisition Co. and Caesars Entertainment Corp.

Founded in 2010, Playtika is headquartered in Herzliya, Israel. Playtika specializes in free-to-play, casino-style games such as "Slotomania" and "Bingo Blitz" that use virtual currency and are designed for mobile and social platforms. Caesars Entertainment spent around $100 million to buy Playtika in 2011.

Robert Antokol, co-founder and chief executive of Playtika, said in a statement Sunday that the Chinese investors will help give his company access to "large and rapidly growing emerging markets." The virtual currency used on the Playtika platforms will remain unexchangeable into real currency.

Playtika's revenue hit $725 million in 2015 and $456 million in the first half of 2016. Playtika's "Slotomania" is currently the seventh highest-grossing game on Apple Inc.'s U.S. App Store. Like most mobile games today, it's free to play and generates revenue from in-game transactions.

The Chinese consortium's investors include Giant Investment Ltd., Yunfeng Capital, a private-equity firm co-founded by Alibaba Group Holding's Mr. Ma, China Oceanwide Holdings Group Co., China Minsheng Trust Co., CDH China HF Holdings Company and Hony Capital Fund.

The deal follows several other large acquisitions in mobile gaming.

Chinese Internet giant Tencent Holdings and its partners last month agreed to buy "Clash of Clans" creator Supercell Oy for $8.4 billion.

French entertainment giant Vivendi SA in May amassed 61.7% of Gameloft's capital and controls at least 55.6% of the votes after it launched a tender offer for its shares.

In February, Activision Blizzard Inc. bought King Digital Entertainment PLC, the company behind the hit puzzle game "Candy Crush Saga" for $5.9 billion.

Dealflow in the videogame industry has already in just the first seven months of 2016 reached an annual record $25 billion, according to mergers-and-acquisitions advisory firm Digi-Capital Inc. Casino-themed mobile games are expected to reach $1.43 billion in global revenue this year, or 3.9% of the $36.42 billion for all mobile games across genres, estimates industry tracker SuperData Research Inc.

Yifan Xie

(END) Dow Jones Newswires

July 31, 2016 21:35 ET (01:35 GMT)

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