Thursday May 28,2015 : SPORTECH SELLS OFF ITS STAKE IN NYX J.V.
GBP 12 million the price tag.
Sportech plc announced Thursday that it has agreed to sell its stake in a 50-50 venture with NYX Gaming to its partner in the social gaming joint venture for GBP 12 million.
The purchase price will be made up of GBP 5.2 million, 2.2 million NYX ordinary shares equating to an aggregate value of GBP 5.2 million and 6.1 percent of NYX and up to a maximum of GBP 1.6 million in deferred consideration.
The agreement comes just 18 months after the two companies partnered up to create the NYX Social Gaming JV.
The agreement is expected to generate an estimated pre-tax profit for Sportech of GBP 8.8 million.
The deal includes Sportech's stake in SNG, one customer contract, online casino software and the full transfer of a number of employees, the company revealed in a statement.
Sportech says the proceeds from the sale will enable it to accelerate its near term North American development plans whilst retaining a material interest in casino and poker online gaming through an equity stake in NYX.
For the year ended 31 December 2014, SNG had not commenced trading and had no revenues or associated costs. Sportech's share of losses to the date of disposal is estimated to be GBP 200,000 and its share of net assets at the date of disposal is estimated at GBP 1.9 million.
Sportech CEO Ian Penrose said that the agreement generated a significant return for Sportech in a short timespan
"The structure of the deal enables us to reinvest in our US growth activities in the sports gaming market, whilst retaining a material stake in the future of online casino gaming in North America. NYX is endeavouring to build a market leading position and we look forward to sharing in this opportunity with them," h said.
Matt Davey, chief executive of NYX, added: "We've enjoyed a strong partnership with Sportech and look forward to opportunities to work together in the future."
The JV empowered Sportech to launch its first online gaming activities in New Jersey in collaboration with the Resorts Casino Hotel.