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UK – Novomatic acquires Talarius from Tatts Group

By - 28 June 2016

Lotteries and wagering firm Tatts Group has sold its UK-based slot machine and internet gaming operator Talarius to Novomatic UK for A$210m. The acquisition means that Novomatic is now the largest AGC operator in the UK.

“We have recognised the potential of Talarius and identified an opportunity for growth regarding the synergies stemming from the local infrastructure. With this transaction, we are able to further expand our market share in the UK, one of the largest European gaming markets,” said Novomatic CEO Harald Neumann.

Tatts said the sale would result in an accounting loss of about $50m in the 2016 full financial year. The company’s shares fell as much as 3.89 per cent to $3.71, their lowest level since April 15.

The news follows April’s announcement that the A$9bn merger between Tatts and rival Tabcorp, had been postponed indefinitely due to concerns that the competition regulator might intervene in the combined entity bidding for Western Australia’s TAB network. Tatts investors have been urging management to dismiss the idea of a merger with Tabcorp and instead spin off its wagering division Ubet, which could be worth up to $2bn, allowing Tatts to concentrate on its legacy lotteries business, which accounts for 70 per cent of its profits.

In the UK, Talarius operates more than 7,500 gaming terminals in 162 operations and employs around 1,000 staff. In 2015, Talarius achieved a turnover of around 65.5 million GBP. Following this transaction, Novomatic is now the largest gaming operator in the segment “Adult Gaming Centers” in the UK.

The sale of Talarius to Novomatic is another move to focus Tatts business on the lotteries sector, while at the same time reducing debt from a business that was struggling in the UK market and returning a slim margin to its Australia-based owner.

“The sale of Talarius follows three years of intense effort to improve the performance of a business that struggled since its acquisition by Tatts back in 2008,” said Tatts CEO Robbie Cooke.

Talarius was formerly the only overseas member of the Tatts Group, having joined the Group as a wholly owned subsidiary at the start of 2008. Talarius operates in 162 venues across the length and breadth of mainland UK, predominately on the UK’s high streets and a small number of venues operating in motorway service areas (MSAs) along the UK motorway network.

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