ogetech, which has more than 38,000 AWPs in 16,000 points of sale across Italy, will acquire Ladbrokes’ Italian retail business for an expected cash consideration of 5.25 million euros, payable on completion of the deal. ´
Under the sale agreement, Cogetech will also assume responsibility for approximately 18 million euros of guarantees currently provided by Ladbrokes, in addition to Ladbrokes’ head office in Milan, 82 shops and 51 corners located throughout Italy.
Ladbrokes said that its Italian retail business made a loss of 9.9 million euros in 2009, with a carrying value of the business of 26.7 million euros. The consideration payable is subject to adjustment based on the actual net financial position of the business at the time of completion of the sale. Any proceeds will be used to pay down debt.
Under the terms of the deal, Cogetech will also assume responsibility for about 18 million euros of guarantees currently provided by Ladbrokes.
Ladbrokes said it took the decision to exit the Italian retail market last August due to revenue growth being below expectations, increased competition in the market place, and the high level of further investment required to achieve critical mass.
Despite its exit from the Italian retail business, Ladbrokes will continue to have a presence in Italy with an increased focus on its online offering, with the company recently becoming the first operator to join Microgaming’s new Italian poker network last month. The sale is subject to approval from the Italian competition authority.