UK-based online gaming company, Sportech has announced they have entered into an exclusivity deal with venture capital firm, Burlywood Capital, over a proposed sale of their football pools business.
The Football Pools business deal is worth €115.3 million, although Sportech has cautioned that there is no guarantee the deal will go forward.
Burlywood, founded by Sportingbet founder Mark Blandford and investment banker Andrew Burnett, plans to form a new company and apply for admission to trading on London’s Alternative Investment Market (AIM). The new company would be chaired by Ian Hogg from Sportech with Conleth Byrne, the current Football Pool’s managing director, taking the position as its chief executive and Brian Mattingley, chairman of 888 Holdings taking up the position of non-executive director.
Burlywood plans to finance the deal using both equity from institutional investors and new debt facility. In addition, to Burlywood needing to raise the necessary cash, Sportech shareholders will need to approve the deal.
“The board of Sportech believes that the proposed disposal represents an attractive opportunity to realise the value of The Football Pools following the implementation of its modernisation program and as it continues to transition its business model,” read a statement from Sportech.
In 2015, The Football Pools business business reported earnings of £15.2 million and revenue of £33.8 million. This year, Sportech has focused on upgrading the business with a new mobile app launched in the spring. The business, which launched in 1923, took a hit when the National Lottery was launched in 1994 and it now has between 200-300,000 active customers, compared to 10 million at its height. Sportech announced that the business “stabilised” in the first half of 2016 with earnings of £7 million and revenue of £14 million.