PE-backed Chinese consortium buys Caesars games business for $4.4b

Domestic online gaming company Giant Interactive - which was privatized by Hony, the CDH platform, Baring Private Equity Asia and its founder and chairman in 2014 and then re-listed in Shenzhen earlier this year - is also a consortium member. According to a Giant filing, there are 11 other participants. A separate statement named China Minsheng Trust and China Oceanwide Holdings Group as two of them.

CIE is a subsidiary of Caesars Growth Partners, a joint venture between Caesars Entertainment Corporation and Caesars Acquisition Company. Caesars Growth Partners uses CIE as a holding company for interests such as World Series of Poker, regulated online real money gaming businesses, and social and mobile games.

Known as Playtika and headquartered in Israel, the social and mobile games unit has created popular free-to-play titles like Slotomania, House of Fund and Bingo Blitz. Its games are played by more than six million people every day across 190 countries and in 12 languages. The business is led by Robert Antokol, who co-founded it in 2010, and was bought by CIE in 2011.

According to Caesars Acquisition Company's 2015 annual report, CIE's revenue came to $766.5 million for the year, up from $586.8 million in 2014. Social and mobile gaming was responsible for $725.3 million of this total, compared to $549.1 million a year earlier. CIE's EBITDA reached $282.7 million and $177 million in 2015 and 2014, respectively.

"Playtika's growth has been exceptional, and highlights its outstanding team, excellent corporate culture, cutting-edge big data analytics, and its unique ability to transform and grow games," said Yuzhu Shi, founder and chairman of Giant. "We are looking forward to Playtika continuing to innovate and excel."

The sale comes as Caesars Entertainment Corporation's largest operating unit, which holds casino and real estate assets, remains mired in an $18.4 billion bankruptcy battle. The company - then known as Harrah's - was bought by TPG Capital and Apollo Global in 2008 for around $28 billion, including $22 billion in debt. It filed for Chapter 11 bankruptcy in the US in January of last year in order to implement a restructuring plan. A number of significant bondholders oppose this plan.

Giant focuses on massively multiplayer online role playing games and currently operates 15 titles, of which 12 are self-developed. It is also developing web games and mobile games, and generates further revenue by licensing its titles in markets beyond China. It was privatized at a valuation of $2.9 billion and completed a backdoor listing in Shenzhen in May worth RMB13.1 billion ($2 billion). It is currently valued at approximately RMB84 billion.

This is the second major outbound acquisition this year involving a Chinese group in the mobile gaming space. In June, Tencent Holdings agreed to buy a majority stake in Finland-based Supercell at a valuation of $10.2 billion, facilitating an exit for SoftBank.

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• Topics
• Greater China
• Technology
• Buyouts
• North America
• CDH Investments Management
• Hony Capital
• Yunfeng Capital
• TMT
• USA
• Outbound investment
• China