The oldest football gaming business in the world looks set to gain a new lease of life via the launch of a new Alternative Investment Market (Aim)-traded company. Gaming business Sportech (SPO) has been approached by venture capital house Burlywood Capital with a £100m offer for its 93-year-old football pools business.
Burlywood, a fund set up by Sportingbet founder Mark Blandford and former investment banker Andrew Burnett, is aiming to float the new entity on Aim, which would house the pools business. The acquisition would be financed through a combination of equity from institutional investors and a new £30m debt facility, which has been approved by a credit committee.
The decision to sell the business comes after Sportech's management invested time and money modernising the football pools business by closing down the "challenging and cost-intensive" paper coupon collector network, which had been in decline for many years. Customers who used this method have now been transferred to a subscription or use the website or the recently launched app.
While the deal is not a certainty just yet, the Sportech board has called the offer an "attractive opportunity to realise the value of the football pools business" following its modernisation.
The proposed Aim-listed company will also see Conleth Byrne and Carl Lynn, managing director and finance director, respectively, of the pools business move across as chief executive and chief financial officer. The board will also include 888 (888) non-executive chairman Brian Mattingley and former Sportech chief operating officer Ian Hogg.
Littlewoods was the first company to provide pools, selling them outside Manchester United's Old Trafford ground in 1923. Rival versions - Vernons and Zetters - were brought together with Littlewoods in 2007 by Sportech under the brand, The New Football Pools.
Should the sale go through the proceeds will be added to its existing £36m of net cash, a position arrived at by the fact that Sportech appears to have won its long-running battle with HM Revenue & Customs over a £97m VAT claim linked to its Spot The Ball competition. But the government is still trying to see if it can launch an appeal in spite of almost a decade of legal wrangling, and the outcome of this won't be known until later this year.
