INTRALOT AND MELCO JOIN FORCES TO CO-DEVELOP CHINA & ASIAN LOTTERY BUSINESS
INTRALOT S.A. announces that through its wholly owned subsidiary INTRALOT INTERNATIONAL LTD., shall acquire a 20,62% stake on a fully diluted basis in Melco LottVentures Limited (HKEx Stock Code: 8198 HK) following equity capital increases of all major shareholders in Melco LottVentures Limited (MLV). The total consideration of the acquisition is HK$305 million (€27,4 million) and will be executed through a capital increase and convertible bonds. INTRALOT’s investment in MLV is a major step in its strategic plan to capture opportunities in the high growth market of People’s Republic of China and monitor other opportunities in Asia.
Through this acquisition, INTRALOT and the major shareholder of MLV, Melco International Development Limited (HKEx Stock Code: 200 HK) (Melco), a leading player in the Asian gaming market, establish a strong partnership; while MLV will promote the Chinese version of INTRALOT’s LOTOS O/S and Gameware Application Software for Lotteries, Fixed Odds Sports Betting and VLT monitoring, the CORONIS family Terminal Application Software and Monitor Games. It is worth noting that following completion of the acquisition and on a fully diluted basis Melco and INTRALOT will become the two major shareholders in MLV, in which Firich Enterprises Co., Ltd. (Firich) holds a notable participation. Melco will remain as the largest shareholder of MLV.
INTRALOT and MLV intend to enter into additional discussions regarding a further increase of INTRALOT’s participation in MLV. INTRALOT, Melco and Firich intend to use MLV as the main vehicle for their lottery and gaming business in China and explore further opportunities in the Asian market.
The People’s Republic of China, the most populous country worldwide, has two lottery operators, China Sports Lottery and China Welfare that have a network of more than 150.000 points of sale. Their joint turnover reached US$14,6 billion in 2007, getting them into the top 10 lotteries in total sales worldwide. Hong Kong presents the highest sales of horse racing and sports betting worldwide, that surmount US$12 billion, posting a notable increase of sports betting sales by 95% during the past couple of years.
Mr. Lawrence Ho, Group Chairman and Chief Executive Officer of Melco, said: “With rapidly rising consumption, I believe Asia, particularly China, will be the growth engine for the world in the next decade. The lottery industry will no doubt benefit substantially from this consumption growth. As it is, lottery spend per capita in China is still very small when compared with other developed countries. For example, in terms of lottery spend per capita, China is still very small (at US$7 per capita) in comparison with other countries such as the US (at US$195 per capita). Most importantly, our ambition is not just confined to China as exemplified by the Company’s recent forays into the region. I am pleased that we have brought in INTRALOT, a leader in the international lottery industry, to become a major shareholder of our subsidiary MLV. This transaction not only reflects the tremendous hidden value of MLV, but also tightens the Melco Group’s cooperation with INTRALOT, hence creating synergetic effects for our lottery business. With the combined strengths of Melco, INTRALOT and Firich, I am confident that we will be able to make MLV one of the leading lottery-related service providers in the Pan Asia region”.
INTRALOT Chief Executive Officer, Mr. Constantinos Antonopoulos, commented: “We are extremely pleased with this significant acquisition and strategic cooperation, as it further strengthens our considerable position in Asia, where we have presence in five Asia Pacific countries. We are confident that through this partnership, we will be successful in the highly promising Chinese market, one of our primary strategic goals in Asia Pacific. By pooling the experience, reputation and expertise of our new distinguished partners and utilising the existing business relationships that MLV has established with the two official lotteries of China, INTRALOT will be able to bring world class products and services into the lucrative Chinese gaming industry”.
Mr. Henry Ko, Chief Executive Officer of MLV, added: “We are happy to see this transaction strengthening the Company with INTRALOT’s distinctive technical and operational knowhow, which is a great advantage in the Chinese lottery market. Benefiting from the long-term alliance with INTRALOT and its recent acquisitions in the region, we expect MLV to achieve further success in the lottery market in Asia”.
MLV Group is principally engaged in lottery related technologies and in the provision of network system integration solutions. For lottery business management services, the Group develops and provides technology systems and services for use in lottery operations in the China and other Asian jurisdictions. It also manufactures lottery terminals for China Sports and Welfare Lottery and lottery-related applications and manages a network of retail outlets for the China Sports Lottery with a strategic plan to significantly expand it. For network system integration, the Group provides network infrastructure involving the installation work in the setting up of clients' networks, professional services for network management and network software for the management and optimization of clients' networks. Its clientele cover all the four major telecommunications service providers, multinational corporations and local governments and large enterprises in China.
Melco is one of the companies with the longest history in Hong Kong. Founded in 1910, Melco was among the first one hundred companies established in the city and was listed on the Hong Kong Stock Exchange in 1927. Today, under the leadership of its Chairman and Chief Executive Officer Lawrence Ho, Melco is a dynamic New Generation Asian Conglomerate focused on leisure and entertainment. Under his stewardship, Melco Group now has significant interests in six listed entities, including three in Hong Kong, two in the US and one in Canada. Its promising performance and distinctive leadership in the industry are also well recognized worldwide.
Firich is one of the leading POS system manufacturers. The company is listed in the Taiwan Stock Exchange and counts four manufacturing factories in Taiwan and China, and worldwide channel partners in all five continents. Firich is one of the major suppliers of INTRALOT for the global market.
INTRALOT, a public listed company, is the leading supplier of integrated gaming and transaction processing systems, innovative game content and sports betting management, to state-licensed gaming organizations worldwide. Its broad portfolio of products & services, its know-how of Lottery, Betting & Video Lottery operations and its leading-edge technology, give INTRALOT a competitive advantage which contributes directly to customers’ efficiency, profitability and growth. With presence in 45 countries, with approximately 4.400 people and revenues of €835,5 m. for 2007, INTRALOT has established its presence on all 5 continents.