World’s largest lottery operator to acquire Caribbean-based lottery
Tuesday, April 6, 2004
BASSETERRE, St. Kitts: The Leeward Islands
Lottery with operations in St. Kitts and Nevis and other Caribbean nations, is
to be acquired by GTech Holdings Corp., the world's largest lottery systems
operator. GTech said in a statement on Monday
it would acquire Leeward Islands Lottery Holding Co. for $40 million in cash.
“We believe the acquisition of LILHCo gives
GTECH a strategic foothold in the Caribbean lottery market, particularly with
its regional Caribbean Lotto game, and also represents significant growth
opportunities in additional jurisdictions within the Caribbean islands,” said
GTech Chief Executive, Bruce Turner. Under
the terms of the acquisition, GTech will gain eight lottery contracts from
LILHCo, which operates lotteries in Barbados, Bermuda, and the U.S. Virgin
Islands. GTech said LILHCo will provide a
gross revenue contribution of $20 million to $25 million, and a net revenue
contribution of $6 million to $8 million, for the fiscal year ending Feb. 26,
2005.
West Greenwich, R.I.-based GTech expects the
acquisition, contingent on regulatory and gaming license approvals, to close
in the first quarter of fiscal year 2005.
GTech in March said it expected revenue and
earnings per share to rise annually through 2008, as it plans to invest more
of its free cash flow in acquisitions and other investments.
GTech in November bought Spielo
Manufacturing, a maker of video lottery terminals, a type of slot machine, to
keep pace with the growth in video gambling.
“Our recent acquisition of Spielo further
enhances the value of LILHCo, given the potential of the growing video lottery
business in the Caribbean community,” Turner said.
Leeward recently obtained a 10-year video
lottery terminal license in the Turks and Caicos Islands and a confirmation
that its existing license in the Caribbean islands of St. Kitts and Nevis
allows for the installation of video lottery gaming.
GTech expects annual revenue growth of an
average 12 percent to 15 percent from 2004 to 2008, and forecast
earnings-per-share gains of an average 15 percent to 18 percent annually
through 2008.
It said it expects the Leeward acquisition
to be neutral to earnings this fiscal year.
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