Pollard closes deal on lotto ticket vending firm

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This article was published 15/08/2017 (2437 days ago), so information in it may no longer be current.

On the heels of the company’s best-ever second-quarter results, Pollard Banknote Ltd. has successfully acquired enough of the shares of California lottery ticket vending machine company, Innova Gaming Group Inc., to close the acquisition that has been ongoing since March.

The combination of strong earnings results and the completion of the Innova deal drove Pollard’s shares past previous 52-week highs on Wednesday to $12.55, share price levels the company has not seen since shortly after its initial public offering in late 2005.

The company said it would consolidate Innova’s revenue and earnings in Pollard’s third-quarter results. In 2016 Innova had US$22 million ($28 million) in annual revenues compared to $246 million at Pollard.

The Winnipeg-based break-open lottery ticket manufacturer reported revenue of $135.3 million during the first six months of this year, a 15 per cent increase from the same period last year. Earnings were $7.8 million during the first half of the year — up 39 per compared to last year.

More than 95 per cent of Innova’s shares were tendered to Pollard’s $2.50 offer by August 15 triggering the compulsory acquisition provisions described in its take-over bid circular.

Rob Rose, Pollard’s chief financial officer, said, “We are very pleased with what is going on and very excited about the future.”

Rose said the remaining shares of Innova will be acquired over the course of the next few weeks when the deal will formally close.

Innova, which is based in Los Angeles, makes vending machines that sell instant win tickets that creatively display the results on video monitors on the machines.

Its main customer base is charitable organizations — mainly in Ontario and Quebec — which raise money from the sale of tickets. Pollard sells to many of the same customers.

Rose said in addition to the savings of not have having the expense of running two public companies, synergies in sales and technology development are also expected.

There are no changes anticipated in Pollard’s Winnipeg operations, which employ close to 800 people. With the addition of Innova, Pollard will have a total of about 1,300 employees.

In a prepared statement, John Pollard, co-CEO of the company, said: “Our manufacturing operations continue to yield positive results through increased productivity and improving cost structures as we continue to more efficiently utilize our expanded capacity to produce increased volumes.

“The addition of Innova and its Diamond Game business is a very exciting new chapter for Pollard and we look forward to the combined strengths of the two companies serving the lottery and charitable gaming sectors in the future.”

martin.cash@freepress.mb.ca