| Online Casinos News> Archive> 2006> January> Italian Lottery Firm Buys GTech Holdings for $4.65 Billion |
Italian Lottery Firm Buys GTech Holdings for $4.65 Billion
16 Jan 2006
Lottomatica SpA, the Italian lottery company, struck a deal Tuesday to purchase, for $4.65 billion, the U.S.-based Gtech Holdings Corp. This acquistion will create one of the largest gambling technology operators in the world.
The companies valued the deal at $4.8 billion, including the assumption of Gtech debt, and said the combined company is expected to operate in more than 50 countries, with revenue of $1.9 billion and more than 6,300 employees. Gtech, of West Greenwich, R.I., provides lottery systems - such as instant ticket machines and lottery terminals located in convenience stores - as well as other services for 25 states, including Illinois and Missouri. Casino lovers will surely love this lottery.
Gtech is larger than Lottomatica, with annual revenues of $1.26 billion, compared to the Italian firm's $707 million. In addition, the deal presents possible regulatory hurdles because Gtech serves so many state lotteries, said Tom Burnett, director of research at Wall Street Access, a New York-based brokerage firm. Lottomatica holds the license for the Italian lottery, one of the largest lotteries in the world. In a note issued to investors Tuesday, Morgan Stanley cautioned that Lottomatica's acquisition is contingent on securing financing, which adds risk. Lottomatica plans to launch a $1.7 billion capital increase to finance the deal, and will seek a $2.3 billion syndicated loan.
