GTECH Enters Into Agreement to Acquire On-Point Technology Systems Inc.
Acquisition of Premier Instant Ticket Vending Machine Provider to Help
GTECH Expand Core Lottery Business in Growing Segment of Lottery Instant
Ticket Business
WEST GREENWICH, R.I. and SAN DIEGO, Jan. 10 /PRNewswire/ -- GTECH Holdings
Corporation, (NYSE: GTK) and On-Point Technology Systems, Inc.
(Nasdaq: ONPT) announced today that they have entered into a definitive
agreement under which GTECH has agreed to acquire, in a merger transaction,
100% of the issued and outstanding stock of On-Point. The definitive
agreement calls for GTECH to pay $3.00 per share of On-Point, or approximately
$43.0 million in aggregate, including amounts payable to warrant and option
holders and approximately $5.2 million to be used to fund e-Point
Technologies, Inc., a subsidiary of On-Point formed to receive certain of its
non-lottery assets.
( Photo: newscom.com )
In addition, each shareholder of On-Point stock shall have the right to
receive one share of common stock of e-Point for each two shares of On-Point
held by such shareholder. The transaction is subject to the satisfaction of a
number of conditions, including approval of the transaction by the
stockholders of On-Point and obtaining necessary third party consents and
approvals.
The On-Point acquisition is part of GTECH's strategy for growing the
Company's core lottery business while creating sustainable long-term
shareholder value. The On-Point acquisition allows GTECH to expand its
participation in the growing instant ticket market. The Company expects the
acquisition will be earnings per share neutral in its fiscal year 2001, which
ends in February 2001, however GTECH expects the acquisition will be accretive
beginning in the 3rd quarter of fiscal 2001.
On-Point has established itself as a leading provider of instant ticket
vending machines, or ITVMs. On-Point's product offerings include PlayPoint
(TM), a next generation ITVM that is capable of dispensing up to 20 instant
ticket games, an industry first. Moreover, On-Point is a developer of leading
edge automated instant ticket dispensing technology, including
CounterPoint(TM), designed to be the most flexible automated countertop
dispensing system in the world.
"We believe there is significant opportunity to grow the instant ticket
services portion of our core lottery business. The acquisition ideally
positions GTECH to capitalize on changes in the global lottery retail
environment while simultaneously positioning our customers to maximize a key
component of their core offerings," said William Y. O'Connor, GTECH's Chairman
and CEO.
In 1998, worldwide instant ticket sales approached $28 billion, or
approximately 20 percent of total lottery sales. In North America, instant
ticket sales reached $15.5 billion, or 37 percent of total lottery sales on
the continent. Instant ticket sales outside of North America were $12.2
billion, or 15 percent of total lottery sales.
"The automation of the instant ticket segment of our industry is still in
the early stages of developing to meet the technology requirements of the 21st
century, and we aim to drive the rapid development of this segment of the
instants market. Applying, integrating and connecting GTECH's and On-Point's
technology is a big step forward in that strategy," added GTECH's O'Connor.
Today, GTECH's online lottery systems validate approximately 70 percent of the
world's instant tickets. GTECH's systems perform instant ticket validation
functions for approximately 85 percent of the Company's domestic customers,
and approximately 25 percent of its international customers. Revenue from
providing instant ticket services accounted for less than 15 percent of
GTECH's total revenue in Fiscal Year 1999.
"The joining of GTECH and On-Point is the joining of two leaders," said
Frederick Sandvick, On-Point Chairman and CEO. "By combining the unquestioned
strength of GTECH's online lottery systems and services and On-Point's instant
ticket business, we will provide lottery customers unsurpassed system
integration."
GTECH is the world's leading supplier of computerized online lottery
products and services. Currently, GTECH has contracts to supply and/or
operate lottery systems for 28 domestic customers and 54 customers outside the
United States. For more information about the Company, please visit GTECH's
website at gtech.com.
Founded in 1990, On-Point Technology Systems, Inc. has pioneered the
development of instant ticket vending machines and dispensing technology. On-
Point's industry leading ITVM engineering has earned the company a 50 percent
share of the world's installed ITVM base. For more information about On-
Point, please visit their web site at onpt.com.
This press release contains forward-looking statements including, without
limitation, statements relating to the future operations and financial
performance of this Company and the Company's future strategies. Such
forward-looking statements reflect management's assessment based on
information currently available, but are not guarantees and are subject to
risks and uncertainties. These risks and uncertainties include, but are not
limited to, GTECH's ability to successfully integrate On-Point into its
business operations and the risks set forth in the Company's filings with the
Securities and Exchange Commission, including its fiscal 1999 Form 10-K and
subsequent filings.
SOURCE GTECH
-0- 01/10/2000
/CONTACT: Robert Rendine , Vice President -- Corp. Comm. of GTECH
Corporation, 401-392-7452, or Lillian Armstrong or David Barnard, CFA of
Lippert-Heilshorn & Assoc., 415-433-3777/
/Photo: newscom.com
PR Newswire Photo Desk, 888-776-6555 or 201-369-3467/
/Web site: onpt.com
/Web site: gtech.com
(GTK ONPT)
CO: GTECH; On-Point Technology Systems, Inc.; e-Point Technologies, Inc.
ST: Rhode Island
IN: CNO FIN
SU: TNM
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