Betting technology firm Sportech sells interest in lottery contract to Inspired Entertainment for $14.5m
- Shares in the AIM-listed company jumped over 5% in early morning trading
Betting technology group Sportech has completed the sale of its Dominican Republic lottery contract to Inspired Entertainment for $14.5million, or around £10.8million.
Shares in the AIM-listed company jumped sharply in early morning trading and are currently up 5.26 per cent, or 2p, to 40p.
The London-listed group said $12.5million would be paid in cash on completion and up to $2million more was payable in royalties from the licensing of digital assets to Inspired.
Deal: Sportech has completed the sale of its Dominican Republic lottery contract to Inspired Entertainment
Sportech said: ‘The Board are assessing the capital requirements of the Group and will provide an update on the use of proceeds from the sale in due course.’
Andrew Lindley, chief executive of Sportech, said: ‘This deal represents Sportech’s exit from the supply of lottery products managed on the Quantum system, which was acquired by Betmakers from the Company as part of the disposal of the Company’s Tote business.
‘This allows the Company’s lottery division to concentrate exclusively on supplies managed on its wholly owned, cloud-based platform. The deal supports the future focus of the Company and we are also pleased to hand our valued customer over to the safe pair of hands that is Inspired Entertainment.’
Lorne Weil, executive chair of Inspired, said: ‘The management of Inspired has a lengthy history with both Sportech and Leidsa and we are pleased that we were able to work together successfully to complete this transaction to the benefit of all parties.’
He added: ‘Leidsa is one of the largest and most successful lotteries in Latin America. Beyond the immediate potential in the Dominican Republic, we anticipate that the lottery systems platform can be further enhanced in order to accelerate the path of our strategic objectives in the worldwide online and retail lottery market.’
Analysts at Peel Hunt said: ‘This disposal puts Sportech in a position where it could consider a further return of capital in due course.
‘However, Covid-19 cases are increasing in Sportech’s core Connecticut market andwe would not expect a capital structure decision until later in 2022.
‘We reiterate our Buy recommendation and 50p TP.’
In August the group announced plans to return around £35.5million to shareholders via a share purchase offer. The company started trading on AIM in July after shifting its shares from London’s main market in the wake of pandemic losses.