GTK Gtech

GTECH to Acquire Leeward Islands Lottery Holding Company GTECH Expands Presence in Caribbean Through Acquisition of Lottery Operating Company; Gains Eight New Long-Term Lottery Contracts WEST GREENWICH, R.I., April 5 /PRNewswire-FirstCall/ -- GTECH Holdings Corporation today announced that it has entered into an agreement to acquire all of the shares of privately-held Leeward Islands Lottery Holding Company Inc. (LILHCo), a lottery operating company headquartered on the Caribbean islands of Antigua and St. Croix. The enterprise purchase price for LILHCo is approximately $40 million, payable in cash. The acquisition, which is contingent upon regulatory and gaming license approvals, and certain other closing conditions, is expected to be completed in the first quarter of GTECH's fiscal year 2005. "Our key focus remains on growing our core lottery business while creating sustainable long-term shareholder value," said GTECH President and CEO W. Bruce Turner. "We believe the acquisition of LILHCo gives GTECH a strategic foothold in the Caribbean lottery market, particularly with its regional Caribbean Lotto game, and also represents significant growth opportunities in additional jurisdictions within the Caribbean islands." LILHCo directors Robert B. Washington, Jr., Chairman and CEO; Robert L. Johnson, founder and CEO of Black Entertainment Television; and attorney Johnnie L. Cochran, Jr. are expected to continue to serve on the LILHCo board. "This acquisition will enable GTECH to provide improved technology, efficiency, and flexibility for LILHCo's existing lottery customers, as well as potential new customers," said LILHCo Chairman and CEO Robert Washington. GTECH currently operates lotteries in Barbados, Jamaica, Puerto Rico, and Trinidad & Tobago, and is developing a complete video lottery solution for The National Lotteries Control Board and The Betting Levy Board in Trinidad & Tobago. Under the terms of the acquisition, GTECH will gain eight lottery contracts from LILHCo, which holds long-term licenses to operate lotteries in Antigua/Barbuda, Anguilla, St. Kitts/Nevis, St. Maarten/Saba/St. Eustatius, and Turks & Caicos, and operates lotteries in Barbados, Bermuda, and the U.S. Virgin Islands. Upon successful completion of the closing, GTECH expects to replace the lotteries' current systems and equipment with GTECH Enterprise Series(TM) architecture and Altura(R) terminals. The consolidated lottery system will be operated from GTECH's national data center in Austin, Texas. In addition, LILHCo recently obtained a new 10-year video lottery terminal (VLT) license in Turks & Caicos and a confirmation that its existing license in St. Kitts and Nevis allows for the installation of video lottery gaming. "Our recent acquisition of Spielo further enhances the value of LILHCo, given the potential of the growing video lottery business in the Caribbean community," continued Mr. Turner. "We plan to pursue VLT opportunities, where viable, at branded entertainment venues in the Caribbean through joint venture arrangements." Established in 1994, LILHCo and its subsidiaries currently employ 139 people throughout the Caribbean community. Based on a projected closing date of mid-May 2004, GTECH expects that LILHCo will provide a gross revenue contribution of $20 million to $25 million, representing gross lottery ticket sales, and a net revenue contribution of $6 million to $8 million, for the fiscal year ending February 26, 2005. GTECH also expects this transaction to be earnings neutral for this fiscal year. 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 anduncertainties 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 goods and services bythe 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 industry; (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 $1 billion in revenues and 5,000 people in 44 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 theCompany, please visit GTECH's website at http://www.gtech.com/. Contact: Robert K. Vincent Public Affairs 401-392-7452 GTECH Corporation DATASOURCE: GTECH Holdings Corporation CONTACT: Robert K. Vincent, Public Affairs of GTECH Corporation, +1-401-392-7452 Web site: http://www.gtech.com/

Copyright