Item 1.01 — Entry into a Material Definitive SPA.
On August 31, 2021, Playtika Holding Corp. (“Playtika”) announced that Playtika UK – House of Fun Limited (“Buyer”), a wholly owned subsidiary of Playtika, entered into a Share Sale and Purchase Agreement (the “SPA”) with the shareholders and option holders (collectively, the “Sellers”) of Reworks Oy, a limited liability company incorporated under the laws of Finland (“Reworks”), pursuant to which Buyer (i) acquired 80% of all issued and registered shares and issued and granted options of Reworks (the “Share Capital”) in exchange for cash consideration of $400 million, subject to customary adjustments for the amount of net working capital and net indebtedness of Reworks at the closing date (“Closing Payment”) and (ii) will acquire the remaining 20% of the Share Capital for additional cash consideration in an amount to be determined based on certain performance metrics (“Earnout Payment”) during calendar year 2022 (the “Subsequent Closing”), as set forth in the SPA. Following the Subsequent Closing, Reworks will be an indirect, wholly-owned subsidiary of Playtika.
The Earnout Payment will be calculated based on the amount of Company EBITDA (as defined in the SPA) in calendar year 2022 in excess of $10.3 million multiplied by 6.0, not to exceed $200 million, as further described in the SPA. In the event Company EBITDA is $10.3 million or less, the Earnout Payment will be $1.
The SPA provides investors with information regarding its terms. The SPA is not intended to provide any factual, business or operational information about the parties thereto. The representations, warranties and covenants contained in the SPA were made only for purposes of such SPA and as of specific dates, were solely for the benefit of the parties to such agreement, and may be subject to limitations agreed upon by the contracting parties, including, to the extent agreed by the parties, being qualified by disclosures: (i) exchanged between the parties in connection with the execution of the SPA and (ii) contained in the disclosure letter to the SPA. The representations and warranties may have been made for the purpose of allocating contractual risk among the parties to the SPA based on the relative knowledge of the parties and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Accordingly, investors and shareholders should not rely on such representations and warranties as characterizations of the actual state of facts or circumstances. Moreover, information concerning the subject matter of such representations and warranties may change after the date of the SPA, which subsequent information may or may not be fully reflected in Playtika’s public disclosures. The SPA is governed by the laws of Finland.
Pursuant to the SPA, the Sellers have agreed to indemnify Buyer for losses related to specified matters, including, among other things, breaches or inaccuracies of warranties of the Sellers contained in the SPA, specified tax matters, breaches of covenants and for other customary matters.
The foregoing description of the SPA does not purport to be complete and is qualified in its entirety by reference to the full text of the SPA. The SPA is filed as Exhibit 2.1 hereto and incorporated herein by reference.
Item 7.01 — Regulation FD Disclosure.
On August 31, 2021, Playtika issued a press release announcing the acquisition of Reworks. A copy of such press release is furnished with this report as Exhibit 99.1 and incorporated herein by reference.
The information in Item 7.01 of this Current Report is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of such section. The information in this report shall not be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, unless specifically incorporated by reference into any such filing. This report will not be deemed an admission as to the materiality of any information in this report that is disclosed in accordance with Regulation FD.
Item 9.01 — Financial Statements and Exhibits.
(d) Exhibits
| * | Schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company agrees to furnish supplementally to the SEC a copy of any omitted schedule upon request. |
