Sportech, the UK football pools owner, is to buy racing and venue management business Scientifc Games Racing (SGR) from Scientific Games, the US lottery specialist with which Playtech formed the Sciplay joint venture last week, for up to $83m (€58.9m, £51.2m) in cash and shares.
The deal is intended to expand Sportech’s strength in pari-mutuel betting on football markets into horseracing, and will allow the British company access to SGR’s client base in North America, central and South America, as well as Denmark, Germany, Finland, Ireland, The Netherlands and Turkey.
It follows Sportech having formed an joint venture with Indian gaming group Playwin this month as part of an acquisition campaign of pools betting companies pledged by chief executive Ian Penrose this year after the company negotiated new banking facilities.
Penrose: “We have been focusing on strengthening our core market better.”
The acquisition has been funded in part by Playtech having taken a 10% stake in Sportech today worth £10m ($16.2m, €11.5m). This is ahead of a third deal in which SGR-seller Scientific will take a 20% stake in Sportech, interlocking the three companies.
Sportech issued the shares to Playtech as part of an open offer of 58.4 million shares priced at 50p each, of which Playtech took 19.88 million, which combined with a placing is intended to raise £29.2m ($47m).
The pools business will pay an initial $65m (€46.1m, £40m) for SGR, followed by $10m on 30 September 2013, plus further payments of up to $8m if SGR meets certain targets over the next three years.
SGR management will join the Sportech board, Penrose said.