Sportech has revealed that the period of exclusivity for the potential sale of its terrestrial lottery business has been extended until October 29 as due diligence with a prospective buyer continues.
Back in August, the firm announced its intention to sell its terrestrial lottery supply contract to maximise its return to shareholders through dividends.
It disclosed that it was in discussions with an interested party and that it had entered a ‘period of exclusivity’ often used so prospective buyers can access the ‘data room’ of a company.
The lottery and betting technology firm’s current contracts last until 2025 and generated an EBITDA of $3.93m in FY19 which was the last full year in which the company’s trading was not impacted by COVID-19.
The fee discussed in August suggested the lottery supply contracts could be sold for $14m-$15m, although the extension of the period suggests the price could be altered.
The potential sale was triggered by a desire to increase dividends to shareholders, with the firm disclosing that it wanted to liquidate around ‘£35.5m of cash.’
A Sportech statement read: “The period of exclusivity afforded to the potential buyer has been extended to 29 October 2021 in order to bring the negotiations and any resulting transaction to a conclusion. There can be no certainty that this transaction will proceed and a further announcement will be made if and when appropriate.”