Australian BetMakers Technology Group (BET) has announced that it has struck an $AUS 56.2m (£34m) conditional agreement to acquire Sportech Plc., which provides mutual betting technology to horse race betting operators across the globe.
The Acquisition
BET will acquire all Sportech racing and digital assets and IPs in the United States, United Kingdom, Europe and Asia. This includes the company’s flagship Quantum Tote betting engine – a digital betting engine which processed £6.7 billion in stakes for clients in 37 countries in 2019.
According to BET, this move will be transformative for their financial and growth prospects around the world and will generate considerable revenue for its business. Furthermore, the deal would provide instant value for investors.
The sum of the Sportech purchase may still be adjusted based on the amount of working capital as well as the company’s pension liability, which is currently estimated to be around £1 million.
The move will turn BET into a leading global supplier of horse racing wagering systems.
Impact on the US Market
Managing Director Todd Buckingham has stated that the acquisition will be especially beneficial to BetMaker’s position and spread on the US market. This would include over 200 additional venues and 25 digital outlets across 36 US States
The acquisition will enhance BET’s already strong growth potential in the US market, Mr Buckingham has said.
However, Mr Buckingham has also noted that the takeover would provide an opportunity to expand BET’s product offering and consumer base not only in the US, but across the UK, Europe and Asia as well.
Financing and Finalizing the Deal
BET will pay for the purchase through placement and share purchase plan. The company’s shares will be priced at £0.60 each, which is a 9.1% discount compared to the previous listing of £0.66.
In total, the placement is calculated at £45.93 million, while the purchasing plan is expected to yield another £5.51m.
Shareholders’ Approval Pending
The placement will be launched immediately once and if the acquisition is confirmed by Sportech’s board of shareholders.
According to Sportech CEO Richard McGuire, the company’s shareholder board believes that the takeover would complement Sportech’s existing platforms, provide additional opportunities for gaming clients and ensure improved investor return opportunities.
Sportech has stated that it would transfer the majority of the transaction capital to its shareholders. The details depend on general capital requirements.
BET’s Buckingham has affirmed that the company plans on retaining all Sportech staff. He has also pledged on significant investments to keep up with innovation in the dynamic sports betting industry.
In November, Sportech shareholders rejected £53.8m acquisition proposal from Standard General due to concerns that the deal would undermine its business and prospects. Sportech’s shareholders will begin the voting process on the week of December 21, 2020.
If the acquisition is set in motion, it will likely be finalised in the first half of 2021.