Playtech is snapping up Italian gaming firm Snaitech after buying an €846m stake

Gambling software firm Playtech revealed a plan to buy Italian betting and gaming company Snaitech this morning after it bought a 71 per cent stake for €846m (£737m) this morning.

Upon completion of the stake sale, which is expected in the third quarter, Playtech will be required to make a mandatory takeover offer for all the company’s remaining shares.

Investors appeared to think Playtech hit the jackpot as shares jumped 8.48 per cent to 826p in morning trading.

Read more: Playtech shares drop despite jump in profit and revenue

“The acquisition of Snaitech represents the continuation of our strategy to invest in leading retail brands in fast growing, regulated markets,” said Mor Weizer, chief executive of Playtech.

Weizer added that the purchase of Snaitech will diversify group revenue and deliver exposure to the huge Italian market, which Playtech said is relatively underdeveloped online. It will also mean more of the company’s revenue will come from regulated markets.

“Playtech has always been at the forefront of its industry and the acquisition offers the opportunity to create a vertically integrated B2B2C [business to business to consumer] operator in Europe’s largest gambling market, delivering significant value to shareholders,” he said.

Fabio Schiavolin, the chief executive of Snaitech, said:

The combination of Playtech’s technology and experience in Italy with Snaitech’s powerful brand mean we will be better able to capture the online opportunity in the fast growing and dynamic Italian market.

Snaitech generated revenue of €890m in 2017, and the compay is also involved in racetrack management and TV services.

The deal will be funded by Playtech’s existing cash and new debt, and it is expected to deliver cost synergies of €10m.

Late last year, Playtech’s shares tanked after it said its full-year performance would be around five per cent below the bottom end of market expectations.

Read more: Playtech shares tumble 20 per cent after warning on profits