Football Pools owner Sportech is in exclusive talks with venture capital firm Burlywood Capital to sell the business for £97.25 million.
The deal for the world’s oldest football gaming company will be bankrolled through a combination of debt and equity, with Sportech saying the deal “represents an attractive opportunity” following a modernisation programme.
Sportech, which began life as Rodime, an Edinburgh-based technology licensing company, said that Burlywood’s management team has proposed setting up a new Aim-quoted company, chaired by Sportech’s former chief operating officer Ian Hogg. That company would then acquire the Pools, which made an underlying pre-tax profit of £7m for the six months to the end of June.
“The board of Sportech believes that the proposed disposal represents an attractive opportunity to realise the value of The Football Pools following the implementation of its modernisation programme and as it continues to transition its business model,” the company said.
Sportech last year attracted the attention of a Canadian software group, Contagious Gaming, but talks over a possible offer for the company were called off in November.
READ MORE: Pools operator catches eye of Canadian firm
Punters no longer fill in paper coupons to bet on football results, with the Pools now operating online. About 300,000 players stake their cash each week in the hope of winning a maximum £3m.
Burlywood Capital focuses on the digital “pay to play” entertainment sector, which it says is the fastest-growing segment within the $800 billion (£600bn) global media and entertainment industry.
The planned sale of the Pools comes amid a long-running £97m battle between Sportech and the taxman over the VAT treatment of Spot the Ball. Sportech argues that it is a game of chance, not skill, and therefore should be exempt from VAT, but HM Revenue & Customs disagrees.