Playtika Holding Corp. — Form 8-K Summary
Business context and reporting period
Playtika filed a Current Report on Form 8-K on September 1, 2021, covering events occurring on August 31, 2021. The filing reports Playtika’s entry into a definitive Share Sale and Purchase Agreement to acquire Reworks Oy, a Finland-based limited liability company.
Transaction and key financial terms
- Playtika’s wholly owned subsidiary, Playtika UK–House of Fun Limited, acquired 80% of Reworks’ issued shares and issued or granted options.
- The initial cash consideration is $400 million, subject to customary adjustments for Reworks’ net working capital and net indebtedness at closing.
- Playtika is obligated to acquire the remaining 20% during calendar year 2022 through a subsequent closing.
- The earnout payment will be based on Reworks’ 2022 Company EBITDA above $10.3 million, multiplied by 6.0, and capped at $200 million. If 2022 Company EBITDA is $10.3 million or less, the earnout payment will be $1.
- Following the subsequent closing, Reworks is expected to become an indirect, wholly owned subsidiary of Playtika.
The filing does not provide consolidated revenue, profit, cash flow, margins, debt, liquidity, or other operating metrics for Playtika or Reworks.
Material changes versus the prior comparable period
This filing does not present period-over-period financial results. The material development is Playtika’s acquisition of an initial 80% interest in Reworks and its agreement to purchase the remaining 20% based on 2022 performance.
Guidance, outlook, risks, contingencies, and unusual items
- The remaining acquisition consideration is contingent on Reworks’ 2022 Company EBITDA and may range from $1 to $200 million based on the contractual formula.
- The $400 million closing payment is subject to adjustments for net working capital and net indebtedness.
- Sellers agreed to indemnify the buyer for specified losses, including warranty breaches or inaccuracies, specified tax matters, covenant breaches, and other customary matters.
- The SPA is governed by Finnish law.
- The filing cautions that the SPA’s representations and warranties were made for contractual risk allocation and should not be relied upon as statements of current factual conditions. The filing provides no separate management guidance regarding the acquisition’s expected revenue, earnings, synergies, or operating outlook.
Important facts for investors to verify
- Verify the final closing adjustments and total cash paid for the initial 80% acquisition.
- Monitor Reworks’ 2022 Company EBITDA and the resulting earnout amount, including the $200 million maximum.
- Confirm completion of the subsequent closing and transfer of the remaining 20% ownership.
- Review the full SPA, including omitted schedules, indemnification provisions, conditions to closing, and definitions of Company EBITDA.
- Assess the acquisition’s effect on Playtika’s consolidated financial statements, cash position, leverage, and future operating results when disclosed.