EU Approval for Gala Sale
The European Union last week approved the purchase of the Gala Group, a U.K. bingo operation, by Candover Investments and Cinven, a pair of investment firms.
Gala's management considered an initial public offering last year, but abandoned those plans. The current owners of the company are CSFB Private Equity and PPM Ventures.
John Kelly, Gala's chief executive, and the rest of the management team are expected to stay on board.
Gala operates an online bingo Web site as well as bingo halls that represent 40 percent of the U.K. bingo market. The company also operates 28 casinos.
ITSI Reports Lowered Contract Revenue
International Lottery and Totalizator Systems Inc. (OTC BB: ITSI) is reporting revenue for the third quarter of fiscal 2003 of $4.6 million, compared with $5.8 million for the third quarter last year.
The quarter's net loss was $0.3 million, or negative 2 cents per share, compared with net income of $0.9 million, or profit of 7 cents per share, during last year's Q3.
For the nine month period, the company is reporting revenue of $11.6 million compared to $16.4 million last year. Net loss for the first three quarters was $1.4 million, or negative 11 cents per share, compared with net income of $1.7 million, or a profit of 13 cents per share, last year.
Mark Michalko, the company's president, attributed the disappointing results to bad timing.
"To a large degree, the quarterly and year-to-date results reflect the fact that while overall expenses for the year have remained relatively flat with the comparable periods a year ago, our contract revenue has been somewhat lower," he said. "This is largely a timing issue, as we had a backlog of $14.5 million at the end of the third quarter."
GTECH Buys Interlott
GTECH Holdings Corp. (GTK) announced this week that it is buying Interlott Technologies Inc. for $9 per share, which places a value of $85 million on Interlott.
The purchase is subject to the approval of Interlott shareholders and regulatory approvals and could be completed by late July. Interlott is the United States' leading manufacturer of instant ticket vending machines, pull-tab vending machines and other security-focused vending services.
GTECH provides on-line services to lottery industry participants on six continents. Interlott CEO David F. Nichols said the buyout will help both companies.
"Interlott has reported 32 consecutive quarters of sustained profitability and has been able to achieve an enviable market presence," he said. "By combining with GTECH, we anticipate building on what has been created as a platform from which the synergies of the combined entities can achieve even higher returns. This transaction offers Interlott and GTECH the opportunity to combine our knowledge and resources to drive even higher growth."