Back to Index
GTECH TO ACQUIRE CREATIVE GAMES INTERNATIONAL
Acquisition of Instant Lottery Ticket Printer to Further Advance GTECH’s Growth Strategy and Strengthen Market Position in the Lottery Industry
WEST GREENWICH, RI - (October 12, 2006) - GTECH Printing Corporation, a wholly-owned subsidiary of Lottomatica S.p.A., announced that it has entered into an asset purchase agreement to acquire substantially all of the assets of Creative Games International, Inc. (CGI), a leading provider of instant lottery tickets for the global lottery industry and a wholly-owned subsidiary of Canadian Bank Note Company Ltd. The acquisition, which is contingent upon certain pre-closing conditions, is expected to be completed in mid- to late-November 2006.
"The acquisition of CGI represents the first step in a multi-step instant ticket/content strategy, affording GTECH the ability to directly leverage the full capabilities and expertise of CGI to drive our entry into the instant ticket printing arena," said W. Bruce Turner, GTECH President & CEO and Lottomatica S.p.A. CEO. "CGI brings to GTECH an immediate distribution channel for GTECH's current and future game and branded content, in addition to having a well-deserved reputation for high-quality printing and services. Combining GTECH's worldwide instant-ticket related products and services with CGI's game design expertise and printing platform creates a complete, end-to-end offering in the instant ticket segment of the lottery business."
"This acquisition by GTECH provides CGI with the capital, resources, and access to new markets necessary to bring us to the next level of competitiveness," said Michael Kozdras, CGI President. "We are entering into this transaction in view of the mutual benefits to CGI and GTECH to combine our knowledge and resources to drive even higher growth."
The instant ticket business is the fastest-growing segment of the lottery industry today. In 2005, instant ticket sales in the United States accounted for more than 55 percent of total U.S. lottery sales, or approximately $27 billion. Worldwide, instant ticket sales are projected to grow to $70 billion by 2010, up from $41 billion today. This represents a tangible opportunity over the long term for GTECH and CGI as international jurisdictions become more accepting of the instant ticket product.
"Working together, we can continue to expand our products and services into new territories, particularly in the developing European and Asian markets, and leverage our extensive lottery customer relationships, government relations experience, global presence, and same store sales focus," said Ross Dalton, GTECH Senior Vice President of Printed Products and Licensed Content Markets. "Given the maturity of online lotteries in many European countries, where instant tickets account for only 10 percent of total lottery sales, we believe, as our long-term instant ticket strategy is realized, we will be in a position to compete more effectively in these particular markets as instant ticket opportunities become available. Likewise, we see potential future opportunities for expansion in Asia, where instant tickets presently account for less than five percent of total lottery sales."
"On the domestic front, we are excited about collaborating with our key Cooperative Services customers to offer licensed and other creative new content," continued Mr. Dalton. "We are also well-positioned to compete more directly in the entire instant ticket value chain including instant ticket warehousing, distribution, ITVMs, marketing support, and sales."
CGI has established itself as a highly-regarded instant ticket printer with contracts throughout North America and the Caribbean. Headquartered in Plant City, Florida, CGI currently employs approximately 55 people and has a total production capacity of more than three billion instant tickets annually.
GTECH intends to maintain and invest in CGI's operations in Florida. An integration plan has been developed in order to assure customers of uninterrupted services.
GTECH is a leading gaming technology and services company, providing innovative technology, creative content, and superior service delivery. Lottomatica is one of the world's largest commercial lottery operators and a market leader in the Italian gaming industry. GTECH and Lottomatica together create a fully integrated lottery operator and gaming technology solutions provider - a combined company with worldwide scale, considerable financial strength, and industry-leading customer solutions. Lottomatica is majority owned by the De Agostini Group, a century-old publishing, media, and financial services company. Lottomatica is publicly traded on the Italian Stock Exchange (LTO), and in FY 2005, had more than € 1.6 billion in revenues and 6,300 employees in over 50 countries when combined with GTECH.
