'Transformational' deal will see Scientific Games Corporation acquire 19.99 percent of enlarged Sportech group while online casino software developer Playtech is to gain 9.9 percent.
Monday 1st February 2010
The operator of The New Football Pools, Sportech, has announced its intention to acquire parimutuel and venue management business Scientific Games Racing for up to $83 million from American firm Scientific Games Corporation.
London-based Sportech stated that it would pay an initial $65 million for Scientific Games Racing followed by a further ten million dollars at the end of September of 2013 while an additional eight million dollars could be due if the purchase meets set targets over the next three years.
Sportech stated that its initial payment would be met by issuing 39,742,179 shares to Scientific Games Corporation at a price of 50 pence each, which represents 19.99 percent of the British firm’s enlarged issued share capital, alongside approximately $32.9 million in cash.
In addition, Sportech revealed that it intends to raise an additional $36.23 million by issuing a further 58,415,520 shares at a price of 50 pence each and that it would use these funds to finance the cash consideration payable to Scientific Games Corporation upon completion of the acquisition. Leading online casino software developer Playtech Limited has already agreed to purchase 19,881,020 of these new shares, which represent 9.99 percent of Sportech, and will be given the right to nominate one Non-Executive Director to the board.
“This is a transformational transaction for Sportech,” said Piers Pottinger, Chairman for Sportech.
“It catapults the business onto the international stage. I am delighted to welcome two new cornerstone investors, both international gaming and strategic partners for Sportech, into the enlarged group. Their support is testament to the great potential of the Sportech business.”
Following the purchase, Sportech stated that it would appoint Brooks Pierce, President for Scientific Games Racing, as its Executive Director while Lorne Weil, Chairman for Scientific Games Corporation, is to serve as a Non-Executive Director.
“We are delighted to announce this significant acquisition for Sportech,” said Ian Penrose, Chief Executive Officer for Sportech.
“It combines two strong businesses to create a unique and integrated platform for the global distribution of pool-based gaming products focused on two of the world's most popular betting sports, football and horseracing. The combined business will have global reach and will be one of the leading parimutuel product and systems providers. As well as significant growth potential in those markets, the combined group will have the scale and capability to compete in the rapidly growing gaming markets in the rest of the world. The acquisition creates a significant international business with strong growth prospects.”
Parimuteul betting is a system in which all wagers of a particular type are placed in a pool with the payout odds calculated by sharing this pot among all successful stakes. This differs from fixed-odds betting where the payout is agreed at the time a wager is placed.
“The transaction with Sportech will enable us to participate in future opportunities for the combined business, which we expect to emerge as a global leading provider in the parimutuel wagering industry,” said Michael Chambrello, President and Chief Executive Officer for Scientific Games Corporation.
“We believe there are significant opportunities for value creation by combining these businesses and we are looking forward to realising that potential value creation as a shareholder in Sportech.”
