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Tabcorp to buy Intecq for $128m

AAP logoAAP 31/07/2016 Trevor Chappell

Gaming giant Tabcorp is set to significantly expand its gaming machine monitoring business through the $128 million acquisition of ASX-listed Intecq.

Intecq provides technology solutions, gaming management systems and monitoring services to more than 1,200 licensed venues, covering more than 70,000 electronic gaming machines across Australia.

Its board has unanimously recommended Tabcorp's offer of $7.15 per Intecq share, which represents a 31 per cent premium on Intecq's Friday's closing price of $5.44.

Tabcorp chief executive David Attenborough says the acquisition will strengthen its gaming services business.

"Intecq complements our Tabcorp Gaming Solutions (TGS) business, providing increased scale and diversification of earnings," Mr Attenborough said in a statement on Monday.

"Intecq's operational and geographic footprint provides an exciting platform for accelerated growth by expanding our product and service offering to both the Intecq and TGS customer base."

TGS had 9,550 machines under contract in February.

Tabcorp expects the acquisition of Intecq to generate earnings before interest, tax, depreciation and amortisation of about $20 million in the year after the integration of Intecq is completed.

The acquisition is expected to add to earnings per share from the first year.

Tabcorp will pay for the acquisition - which is subject to approval from Intecq shareholders, the Australian Securities and Investments Commission, the court, gaming regulators and the Australian Competition and Consumer Commission - from existing cash and bank facilities.

Shares in both Tabcorp and Intecq were in a trading halt in early trading.

Tabcorp last traded at $4.89 and Intecq at $5.44.

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