Playtech has reached a deal with Grupo Caliente to settle the commercial disputes related to the companies’ Mexican joint venture, Caliplay.
The companies have struck an amended strategic agreement that gives Playtech a 30.8% equity stake in Cali Interactive, the new holding company for the Caliplay Group which will be incorporated in the U.S. Playtech also has the right to appoint a director to Cali Interactive’s board and receive dividends as a shareholder.
Playtech has also extended its B2B software license and services agreement with Caliplay for another eight years.
Cali Interactive will pay Playtech an additional $140 million in cash over a four-year period as a term of the deal.
“During the past nine years, we have worked closely with Caliplay to create a successful and rapidly growing digital business in Mexico,” said Playtech CEO Mor Weizer. “The revised arrangements mark the beginning of an exciting new chapter that will build on the impressive progress to date, with a view to driving significant further growth for Cali Interactive in the future.”
“We are delighted to finalize this renewed agreement, which shows the inherent strength of the strategic relationship between Caliplay and Playtech,” added Caliplay Chairman Emilio Hank.”We are focused on growing Caliplay, leveraging our core strengths and Playtech’s leading technology to broaden our geographical footprint as we continue our mission to provide the best gaming experiences to our customers in Mexico and beyond.”
The revised arrangements are subject to Mexican antitrust approval. Closing is expected in Q1 2025.
New agreement resolves Caliplay dispute
The new deal brings an accord in the commercial dispute between Playtech and Grupo Caliente, Mexico’s largest casino operator. The two companies shave been at loggerheads over an issue of alleged unpaid service fees.
The companies each sued the other claiming contractual breaches regarding Caliplay. However, despite the lawsuits, Playtech had stated that Caliplay remains an important customer and that the two parties keep an open dialogue.
All ongoing legal proceedings between Playtech, Caliplay and Caliente have been paused and they will be dismissed once the new deal is ratified and completed.
Playtech confirmed that Caliplay had resumed its software fees and has paid more than 80% of the outstanding payments, amounting to more than $166 million. The remaining balance is being held in escrow and is expected to be released by the end of 2025, or upon completion of the revised terms.
Playtech raises 2024 EBITDA guidance
As well as announcing the new Caliplay agreement, Playtech issued a trading update.
The company said that its strong B2B performance in H1 2024 has promoted it to raise its 2024 EBITDA guidance to slightly ahead of initial expectations.
Playtech put the good results down to a combination of revenue growth in the Americas, greater cost control and good strategic progress in the U.S. and Canada.
The company will release its interim H1 results on Sept. 30.
