Sportech forecasts upgraded as Data Tote deal cleared
Office of Fair Trading clears Data Tote acquisition with 2014 predicted to be a "watershed year" for the Group
Sportech’s acquisition of greyhound and horse race betting services provider Data Tote has been cleared by the UK Office of Fair Trading (OFT).
The £3.1m deal was first announced in September, however the OFT asked for comments on the transaction on 4 November and Sportech stated it was willing to fully co-operate with the trade body to ensure the deal went through.
Having assessed the acquisition for its potential effect on the tote betting technology sector, the OFT found it to not qualify for further inspection or referral to the Competition Commission, and has now cleared the deal to complete.
The deal will see Sportech provide tote services to the majority of greyhound racing tracks based in the UK and Ireland.
The OFT announcement comes as investment banking firm Panmure Gordon upgraded its forecast for the company, citing 2014 as a potential watershed year for the group and upgrading its target price from 145p to 153p.
Over the next 12 months Sportech will launch its proprietary online horse racing betting service in Connecticut, and its recently announced joint venture with NYX is also expected to further increase its presence in US-based online gaming.
Having spun-off its UK-facing egaming operations earlier this year, the group will also have no exposure to the UK Point of Consumption tax with more than 50% of the group’s EBITDA expect to come from the US by 2015.
“This should result in a re-rating over the next 18 months as the market gains comfort from the US growth strategy,” a note issued by Panmure Gordon said.