Tabcorp agrees deal for £58.4m ACTTAB

Australian wagering operator Tabcorp has reached an agreement with the Australian Capital Territory Government to acquire ACTTAB for AUS$105.5 million (£58.4m).

ACTTAB is a territory-owned provider of totalisator and fixed odds wagering, Keno and Trackside products. The business offers its services and products through a distribution network comprised of 53 retail outlets located throughout Canberra, as well as telephone and internet platforms.

As part of the acquisition, the ACT Government will issue Tabcorp a 50 year exclusive totalisator licence, a sports bookmaking licence for an initial term of 15 years with further rolling extensions to a total term of 50 years, and approvals to offer Keno and Trackside products for 50 years.

Ongoing payments to be made by Tabcorp in respect of the totalisator are limited to an annual licence fee of $1 million (£0.6m) and CPI increases. There is no wagering tax payable to the territory on the totalisator licence. However, the wagering tax payable on the sports bookmaking licence currently has an expected effective tax rate of less than 1 per cent of turnover.

Managing Director and CEO, David Attenborough, said: “The acquisition of ACTTAB presents a unique opportunity for Tabcorp to secure long-term licences on highly favourable terms in a jurisdiction that is complementary to our existing Wagering and Keno businesses in Victoria and New South Wales. We look forward to leveraging our capabilities to strengthen the product offering available to ACTTAB customers and to deliver the best outcome for the racing industry and other stakeholders including our venue and community partners.”

The group intends to fund the acquisition from existing bank facilities. Tabcorp expects the acquisition will generate EBITDA of approximately $14 million (£7.8m) in the year following completion of integration of the business and will be EPS accretive. Integration is expected to take around 12 months.

The ACT Government has agreed to certain protections which will provide regulatory certainty in respect of the key terms of the licences.