The announcement came only days after Giant won the pre-sale auction process and received an exclusive period to make its bid.
GIG is not buying the WSOP brand or real-money online poker and casino business.
GIG is not going it alone. It formed a consortium to make the bid, consisting of: Giant Investment (HK) Limited; Yunfeng Capital, a private equity firm founded by Alibaba Group Holding Ltd. founder Jack Ma; China Oceanwide Holdings Group Co., Ltd.; China Minsheng Trust Co., Ltd.; CDH China HF Holdings Company Limited; and the Hony Capital Fund.
Co-Founder and CEO of Playtika, Robert Antokol, said:
“This transaction is a testament to Playtika’s unique culture and the innovative spirit of our employees who for the past six years have consistently designed, produced and operated some of the most compelling, immersive and creative social games in the world. We are incredibly excited by the commercial opportunities the Consortium will make available to us, particularly in its ability to provide us access to large and rapidly growing emerging markets.”
CIE Chairman and CEO Mitch Garber commented:
“It has been a particularly rewarding experience growing Playtika from a 10-person start-up, when CIE acquired them in 2011, into a global leader. Playtika today is a highly profitable growth company with more than 1,300 employees, multiple top grossing titles and millions of daily users. Robert is a true visionary and Israeli business leader who has created not only a great business, but also the most unique corporate culture I have seen in my career.”
The deal leaves WSOP.com in New Jersey and Nevada as corporate orphans. They contributed less than 5 percent of CIE’s revenues, and although expected to generate around $40 million in revenues this year, they remain only a small business division on the scale of Caesars’ other operations.
The complex structure of Caesars means that CIE is owned 50/50 by the Caesars Acquisition Company (CAC) and Caesars Entertainment. Neither is part of the voluntary bankruptcy process in which the Caesars Entertainment Operating Company (CEOC) currently finds itself.
The bankruptcy includes a bitter legal fight amongst the group’s creditors over whether there was an unfair distribution of assets when the group restructured.
In part resolution of that conflict, Caesars is in the process of a corporate restructuring that will make available to creditors the proceeds from the CIE sale of Playtika.
With over $20 billion in debt, the group badly needs the $4.4 billion raised from the sale, but it may not be averse to raising more money if it can sell the WSOP brand too.
Caesars now has options to sell the rest of CIE, in effect the WSOP business, or merge it into another part of the group. As a standalone business it is too small to merit the extraordinary talents of Mitch Garber.
Mitch Garber is on his third major CEO job. From 2004 to 2006, he was CEO of Optimal Payments, owner of NETELLER. From 2006 to 2008 he led PartyGaming — later bwin.party — through the carnage that followed the introduction of the UIGEA and the company’s exit from the US market.
Some industry analysts suggested that he might get the top position at Caesars when Gary Loveman stepped down (paywall).
Garber was appointed Vice Chairman of Caesars Entertainment as part of the announcement that Caesars Entertainment and Caesars Acquisition Co would merge. But the CEO position eventually went to Mark Frissora, the former CEO of Hertz car rentals.
As CEO of CIE, Garber bought 51 percent of Playtika in 2011, at a valuation of between $80 million and $90 million. CIE later bought out the rest of the company, and together with subsequent investment committed a total of around $250 million to the business.
Building the business from a company with little more than a dozen developers to a gaming behemoth worth $4.4 billion is a massive achievement. At the time of the sale, Playtika had monthly turnover of approximately $100,000.
While much credit goes to the founders of Playtika, Uri Shahak and Robert Anatol, the corporate vision and phenomenal execution credit is shared with Mitch Garber.
At Amaya, Rafi Ashkenazi is standing in as interim chief executive after David Baazov took time off to prepare his potential bid for the company and deal with insider trading allegations.
Ashkenazi has a stellar reputation within the gambling industry, having been COO of Playtech before becoming CEO of the Rational Group. The Amaya board is highly likely to confirm him in the position, but an outside chance exists that they could reach out to Mitch Garber.
If David Baazov thinks he can put together a buy-out deal for Amaya, how much more likely is it that Mitch Garber could also put one together?
Garber is not known for the sort of corporate financial magic that David Baazov displayed in buying Amaya, but as the front man for an investment group, Garber would provide enormous credibility for anyone serious about an acquisition.
William Hill has disposed of its CEO James Henderson, partly for his failure to make the online gambling business work well. Garber is clearly capable of standing in, but perhaps the job just isn’t big enough for him.
The only thing that is clear, is that after building CIE so rapidly and efficiently, Mitch Garber will be receiving plenty of offers for new opportunities should he decide to leave Caesars.
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