GTECH ACQUIRES MAJORITY HOLDING IN ST MINVER PARENT
Euro 28 million paid for successful white label company in show of confidence in the industry
GTECH Corporation, a subsidiary of Lottomatica S.p.A. has agreed to acquire 90 percent of Gibraltar-based St Enodoc Holdings Limited and its subsidiaries, including St Minver Limited, a highly successful provider of end-to-end white label gaming services.
GTECH will pay Euro 28 million for the 90 percent equity stake on a cash and debt free basis at closing, and up to an additional Euro 13.6 million based on the performance of the business in 2008 and 2009. The acquisition, which is expected to be completed within the current quarter, is subject to regulatory and other closing conditions.
Ten percent of St Enodoc will remain with Gary Shaw, founder and Chairman, until at least 2012, at which point both Shaw and GTECH have the right to cause GTECH to acquire Shaw's remaining shares.
GTECH expects to fund the transaction from existing cash balances. In its last reported fiscal year ended June 30, 2007, St Enodoc Group had total revenues of approximately Euro 13.7 million.
"As we continue to expand our presence in regulated Internet-based gaming, St Enodoc is a logical fit," said Jaymin B. Patel, GTECH President and CEO.
"The St Enodoc group has provided white label management services to some of the most recognised brands in Europe operating interactive bingo, poker, and casino games including specialised support for peer-to-peer networks around managing fraud, collusion, and various tournaments.
"For companies in both gaming and non-gaming industries that want to offer Internet-based gaming, St Enodoc provides solutions to afford these organisations the ability to maintain their brand and customers while essentially outsourcing the gaming operation to St Enodoc."
"With more gaming markets around the globe approving and regulating interactive gaming channels, GTECH will be well positioned to provide a full- service solution or part thereof," Patel added.
"As the market enters a new phase of development, industrial scale on a global basis will determine which businesses succeed," said Gary Shaw, founder and Chairman of St Enodoc. "The St Enodoc management team is delighted that it can leverage its Internet gaming capability to be part of one of the companies that will shape the future of the gaming market."
The regulated Internet-based gaming market generates an estimated Gross Gaming Yield of $15.1 billion annually, claims GTECH. Lottomatica Group believes this market is poised for continued growth, and there will be an increasing demand for Internet-based gaming services and technology in regulated markets in Europe, Asia, and Latin America.
"Given that St Enodoc's strategy has always been to operate in markets where its offerings are legal and regulated, joining a truly global, highly- regulated business like GTECH, made the most sense," said Jim Ryan, CEO of St Enodoc. "We can now leverage GTECH's unrivalled international footprint to further the reach and scale of our games and services."
Founded in September 2003, St Enodoc currently employs approximately 165 people in Europe including London and Gibraltar as well as Hyderabad, India. GTECH intends to maintain St Enodoc as a separate operation and the St Minver brand identity.
The founder and entire senior management will remain with the organisation to continue to help grow and develop the business. Currently, St Minver has 98 gaming sites and 76 media, lifestyle, and other branded partners using its white label services.
The company does not accept wagers from the United States.
St Minver operates one of the largest bingo networks in the world and offers pooled bingo rooms by currency, each with uniquely managed and optimised schedules. In addition, St Minver supports Boss Media's International Poker Network, the fifth largest European poker network hosting more than 12 000 players concurrently at peak times.
Lottomatica is majority owned by De Agostini, which belongs to a century-old publishing, media, and financial services group. Lottomatica is publicly traded on the Italian Stock Exchange (LTO), and in 2007, had approximately Euro 1.7 billion in revenues and 5 900 employees in over 45 countries when combined with GTECH.