Australian gambling provider The Tatts Group recently announced that it is selling its UK subsidiary Talarius to another Australian based company called Novomatic for A$210 million.
Talarius operates a chain of slot machine venues across the UK under various brands such as Silvers, Winners, Quicksilver Motorway and Quicksilver. Spread over multiple locations, the company owns and operates around 7,500 slot machines.
According to Tatts, the sale of the subsidiary would result in an accounting loss of A$50 million for the current financial year.
Excluding Talarius, the company is likely to report net profit in the range of A$255 million to A$265 million. If financial results for Talarius are included, the net profit estimates for 2016 would be between A$259 million and A$282 million.
Brisbane-based Tatts Group is present across wagering, gaming and lotteries industries with operations in Australia, New Zealand and United Kingdom. Tatts CEO Robbie Cooke said that the management had decided to sell Talarius after continued attempts to improve its business performance had fallen through. Tatts had purchased Talarius in 2008 as a part of its expansion strategy but has been struggling since then to revive the business. In 2015, Talarius contributed to only 2 percent of Tatts’ earnings amounting to around A$6.2 million.
Cooke said that the business was now developed enough to be leveraged in the current gaming scenario. Tatts intends to use the sale proceedings to pay off its corporate debt. After current year adjustments, the group has a current net debt of around $1 billion. The company has additionally mentioned that this year’s profit is likely to be affected by a charge of A$22.4 million against interest and legal fees that had been incurred in relation to a lawsuit filed against it regarding its slots license in the state of Victoria.
Novomatic is a global gambling provider that offers a range of gaming products. The company develops, supplies and operates gaming solutions across the world. Novomatic currently operates over 235,000 gaming devices and video lottery terminals spread across 1,600 outlets. The company is active in all key gaming segments such as lottery, casino, sports betting, as well as online and mobile forms of gaming.
This acquisition is part of Novomatic’s game plan to expand globally. The company also paid out A$500 million to acquire a majority 53 percent stake in Ainsworth Game Technology, a large Australian slot machine manufacturer. The deal was formally approved by Ainsworth’s shareholders earlier this month.