GTECH Holdings Corporation announced on April 30, 2004, that they had completed the acquisition of Spielo Manufacturing Incorporated. Spielo was established in Canada in 1990 and was involved in the design, manufacture, and distribution of Video Lottery Terminals (VLTs), games, central systems, and services. According to the GTech press release Spielo would be a wholly-owned subsidiary and its manufacturing operations would remain in Canada.
This post is being made for archival and historical purposes, and as such we will provide the GTech original press release in it’s entirety. The press release can be found here: http://www.gtech.com/news/2004news/0430a.asp
GTECH COMPLETES ACQUISITION OF SPIELO MANUFACTURING INCORPORATED
(West Greenwich, Rhode Island — April 30, 2004) – GTECH Holdings Corporation (NYSE:GTK) today announced that it has completed the acquisition of Spielo Manufacturing Incorporated, a leading provider of video lottery terminals (VLTs) and related products and services to the global gaming industry. The enterprise purchase price for Spielo was an all-cash transaction of approximately US$150 million. In addition, Spielo shareholders have received an initial earn-out payment of approximately US$7 million, as part of a maximum amount of up to US$35 million, based upon Spielo achieving certain VLT installation objectives, over time, in New York.
“The acquisition of Spielo furthers our growth strategy in our core lottery space by broadening and strengthening our offerings in the rapidly growing VLT business,” said GTECH President and CEO W. Bruce Turner. “With the acquisition now complete, GTECH is better able to deliver a comprehensive, integrated VLT solution with a single point of contact and accountability.
Spielo is a great strategic fit for GTECH, with many opportunities to leverage in areas such as content, online technology, and other innovations,” continued Mr. Turner. “Our VLT business will also provide an avenue for expanding the value of our Enterprise Series platform in new ways.”
Spielo will operate as a wholly-owned subsidiary of GTECH and its manufacturing operations will remain in Canada.
GTECH expects that Spielo will provide a revenue contribution of US$70 million to US$75 million starting in the second quarter of fiscal 2005. For the first 12 months of operation post-acquisition, Spielo is expected to contribute revenues of US$90 million to US$100 million, and earnings per share to GTECH in the range of US$0.01 to US$0.02.
Certain statements contained in this press release are forward looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such statements include, without limitation, statements relating to the prospects and financial outlook for the Company, which reflect management assumptions regarding: (i) the future prospects for and stability of the lottery industry and other businesses in which the Company is engaged or expects to be engaged, (ii) the future operating and financial performance of the Company (including, without limitation, expected future growth in revenues, profit margins and earnings per share), and (iii) the ability of the Company to retain existing business and to obtain and retain new business. Such forward looking statements reflect management’s assessment based on information currently available, but are not guarantees and are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated in the forward looking statements.
These risks and uncertainties include, but are not limited to, those set forth above, in the Company’s subsequent press releases and on reports by the Company on Forms 10 K, 10 Q and 8 K, and other reports and filings with the Securities and Exchange Commission, as well as risks and uncertainties respecting: (i) the potential impact of extensive and evolving government regulations upon the Company’s business; (ii) the ability of the Company to continue to retain and extend its existing contracts and win new contracts; (iii) the possibility of slower than expected growth or declines in sales of lottery and gaming goods and services by the Company or the Company’s customers; (iv) exposure to foreign currency fluctuations; (v) risks and uncertainties inherent in doing business in foreign jurisdictions; (vi) the relatively large percentage of the Company’s revenues attributable to a relatively small number of the Company’s customers; (vii) the possibility of significant fluctuation of quarterly operating results; (viii) the intensity of competition in the lottery and gaming industries; (ix) the possibility of substantial penalties under and/or termination of the Company’s contracts; (x) the ability of the Company to respond to technological change and to satisfy the future technological demands of its customers; (xi) opposition to expansion of lottery and gaming; (xii) the Company’s ability to attract and retain key employees; and (xiii) the possibility of adverse determinations in pending legal proceedings.
GTECH, a leading global information technology company with over $1 billion in revenues and 5,400 people in 45 countries, provides software, networks, and professional services that power high-performance, transaction processing solutions. The Company’s core market is the lottery industry, with a growing presence in financial services transaction processing. For more information about the Company, please visit GTECH’s website at http://www.gtech.com/.