Sportech sells Vernons to NetPlay TV
Assests of Sportech's loss making egaming business transfers to NetPlay for £3m as Sportech focuses on US market
Sportech has sold its UK-facing egaming business Vernons to NetPlay TV for £3m after conceding only significant investment would be able to turnaround the “disappointing” performance of the loss making division.
The move to dispose of Vernons was made following a six-month strategic review of the business with Sportech’s management board having concluded the money required to return the business to profit would be better invested in its developing US branch.
Vernons posted losses of £0.7m for the six months ending 30 June 2013 and Sportech said the egaming business continued to operate at a deficit during H2.
Alderney-licensed NetPlay TV will take on the Vernons’ branded online casino, poker, bingo and sportsbook websites, the rights to the customer database of the websites and a number of employees.
The net cash consideration receivable for the disposal is £2.9m following a £0.1m contribution to restructuring costs, to be settled in full, in cash, on completion.
“Our loss making Vernons casino, poker and bingo business has had a difficult year, and the impending introduction of Point of Consumption tax next year increases the challenges ahead for a sub scale operation in an increasingly competitive marketplace,” Ian Penrose (pictured), chief executive of Sportech, said.
“This is another positive step in increasing the focus of Sportech on operations where we hold competitive advantage, particularly those in the US,” he added.
AIM-listed NetPlay TV said the acquisition of Vernons would provide immediate benefits to the business and is an important step in its plans to add scale to the company.
“This represents the acceleration of our strategy to grow through both organic growth and strategic acquisitions,” Charles Butler, NetPlay TV’s chief exec, said.
“We look forward to investing further in our proven marketing strategy for Vernons.com alongside our existing brands and continuing to drive value for shareholders.”
Last month, Sportech continued its US drive after signing an agreement with fantasy sports game developer Picklive to target the growing US fantasy sports market.
Sportech’s US business continued to grow throughout the first half of 2013, with the company’s US horseracing business up 22% and accounting for 40% of operational EBITDA.