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Playtika launches $1.67bn initial public offering

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Social gaming giant Playtika has launched its long-awaited initial public offering, with plans to sell 69.5m shares and raise up to $1.67bn. 

The business itself will sell 21.7m shares of common stock, with a further 47.8m to be sold by majority stockholder Alpha Frontier Limited, priced in the range of $22 to $24m per share. 

At the lower end of the price range, this would raise up to $1.53bn, and up to $1.67bn at the upper end, of which Playtika will receive between $447.4m and $520.8m. At the midpoint of this price range, the business is valued at approximately $9.70bn. 

The underwriters will also be granted a 30-day option to buy an additional 10,425,000 shares of common stock from Alpha Frontier, potentially taking total proceeds from the IPO to $1.92bn. 

The sale of the 47.8m shares by Alpha Frontier Limited, the holding company controlled by the Giant Investments-led consortium of Chinese investors that acquired the business in 2016, will see its holding reduced from 96.7% to 80%. 

The stake held by Playtika’s management team would be reduced from 3.3% to 2.9% through the IPO, with public stockholders owning 17.1% of the business. 

Morgan Stanley and Credit Suisse will act as lead bookrunners for the offering, with Citigroup, Goldman Sachs UBS and Bank of America Securities serving as additional bookrunners, then Baird, Cowen, Stifel and Wedbush Securities as co-managers.

Once the offering completes, Playtika will trade on the Nasdaq Global Select Market under the PLTK symbol.

The business first announced plans to launch the IPO in October 2020, though it was not until late December that its registration statement was made public. 

This revealed that for the nine months to 30 September the business saw revenue rise 28.5% year-on-year to $1.80bn, with adjusted earnings before interest, depreciation and amortisation up 41.2% to $665.8m. 

Over that period its games averaged 11.4m daily active users, up 15.2%, with revenue per DAU rising to $0.57.

For the year to 30 September, revenue amounted to $2.29bn, and adjusted EBITDA $815.2m. 

The registration statement also revealed that the business’ long-term debt stood at $2.32bn.