This move was made in light of the deteriorating market conditions. However, this is not the end of the deal as the UK-based gambling software provider still plans to revive it in the future as it also states that it will look for other alternatives to pursue the plan with Caliente.
SPAC Plan Relinquished
As a background, a Special Purpose Acquisition Company (SPAC) is a type of investment vehicle that is commonly used in the United States. SPACs are created to raise capital through a public offering, to acquire an existing company.
The merger between Playtech and Caliente, a Mexican-based gambling operator, through SPAC will allow the company greater access into Latin American markets in the US and has been announced earlier this year. This move was motivated by both companies who aim to capitalize on the booming market of online betting which started during the pandemic.
However, the market conditions seem to be not favorable with the plan. That’s why Playtech announced that as of the moment, they will not continue the transaction. As Playtech Chief Executive Mor Weizer and former CEO and current investor Tom Hall addressed the issue in an interview:
“Challenging global economic and market conditions which were not present in February made it impossible to create the right structure for a new company.”
This year has been tough for investors as the Russia-Ukraine conflict continues to create supply chain strains and squeeze spending. This is why it’s no surprise that several deals have fallen through this time around.
It’s Not the End for Caliplay
Even though the plan will not be as early as it should be, we can expect that the plan will still have room to continue as both companies are exploring possible alternatives to still make it happen.
“Both parties (Playtech and Caliente) also continue to have discussions with the SPAC (special purpose acquisition company) and its associates regarding this alternative opportunity,” Playtech Board of Directors said based to Reuters.
“The Company continues to explore alternative opportunities with Caliplay… to build a standalone US gaming business under the Caliente brand,” they added.
Further details about the negotiations were not disclosed by the company.
Playtech’s Journey in the US
Playtech’s online casino content was first introduced in the US market, specifically in New Jersey last August 2020 when it launched its award-winning Casino content with bet365. This comes after Playtech had finished the regulatory process and gets approved last July 2020.
It also partnered with BetMGM last September 2020. The agreement provides that the software will be available across the BetMGM Casino, Borgata Online, and PartyCasino NJ brands which are active in the Garden State.
Aside from the SPAC deal, its latest strategic US agreement is with Parx Interactive in Michigan, Indiana, New Jersey, and Pennsylvania last 2021.