Tabcorp is buying into electronic gaming machines

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Tabcorp, the Australia betting network, is expanding its non-traditional business through the $128 million acquisition of INTECQ Limited, an electronic gaming machine developer and marketer.

INTECQ has commercial agreements with 1,200 licensed venues which have a network of more than 70,000 electronic gaming machines across Australia.

One part of its business, eBet, supplies member loyalty software, tracking systems and cashless gaming tools for pubs, clubs and casinos.

The company used to make games such as these pictured below but has since switched to concentrating on servicing the gaming machine sector with software and systems.

The electronic gaming sector is worth about $10.8 billion a year in Australia.

Tabcorp’s CEO David Attenborough says the acquisition is an exciting opportunity for Tabcorp to strengthen its gaming services business.

INTECQ executive deputy chairman Tony Toohey and acting CEO Peter Walford, have agreed to remain with the business following the acquisition.

Under the takeover, INTECQ shareholders will get $7.15 cash for each share. The shares traded at $5.44 on Friday.

Tabcorp expects the acquisition will generate EBITDA (Earnings before interest, taxes, depreciation and amortisation) of about $20 million in the year following integration.

In 2015, the company had $51.6 million in revenue.

In the third quarter of 2016, Tabcorp’s gaming services revenue was $26.9 million, up more than 11%.

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