(Alliance News) - Sportech PLC on Tuesday said it has agreed a deal to sell its Global Tote business for GBP30.9 million to Australian odds comparison platform BetMakers Technology Group Ltd.
Sportech, a Bristol, UK-based gambling technology firm, on Monday in response to press reports had said it was in advanced talks with BetMakers over a potential disposal of the business. Global Tote provides technology solutions and services to gaming businesses, particularly in the horse racing industry.
"Its systems processed approximately USD12.2 billion in betting handle in the financial year ended December 31, 2019 for clients across 37 countries," Sportech explained on Tuesday.
In 2019, the unit posted a pretax loss of GBP800,000 on revenue of GBP30.8 million.
The deal needs the consent of both Sportech and BetMakers shareholders.
"It is Sportech's board of directors' current intention to return the majority of the proceeds to the company's shareholders when the board considers it opportune to do so," Sportech said.
"Given the historically low level of prevailing interest rates available on cash deposits, the sale of the Global Tote business will be earnings dilutive to the group in the short term. However, the board believes that over the medium to long term, the disposal will improve total shareholder returns as a result of the potential use of proceeds."
Following the sale, Sportech's units will consist of its Venues business, which operates horse racing and greyhound betting, its Lottery arm, and the Bump 50:50 subsidiary which offers "in-stadia" lotteries to sports teams in the US and Canada.
The Venues business operates under licence from the US state of Connecticut.
"We previously set out that one of the group's transformation objectives included evaluating and executing material corporate opportunities which deliver tangible investor returns. The board believe this transaction very much achieves that objective," Sportech Chief Executive Officer Richard McGuire said.
Sportech shares were 0.4% higher at 28.35 pence each in London on Tuesday morning, giving the company a market capitalisation of GBP53.4 million.
BetMakers is listed on the Sydney stock exchange, and its shares closed 1.5% higher at AUD0.67 each on Tuesday, valuing the firm at AUD402.3 million, about GBP221.6 million.
By Eric Cunha; ericcunha@alliancenews.com
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