Magna Entertainment Corp. announced July 26 that it has exercised its first purchase option to acquire an additional 30% equity interest in AmTote International, Inc. and has sent written notice of its intention to exercise its second purchase option to acquire the remaining 40% equity interest in the wagering technology company.MEC expects that the aggregate purchase price for the remaining 70% of AmTote will be approximately $14 million. AmTote reported earnings before interest, taxes, depreciation and amortization of $7.2 million and net income of $3 million for its most recent fiscal year ended Feb. 25. Both transactions are pursuant to the terms of the stockholders agreement dated Aug. 21, 2003. MEC first acquired a 30% equity and voting interest in AmTote from the Corckran family and associates, in August 2003 for a purchase price of $3.8 million. "We are enthusiastic about our increased ownership in AmTote International," said Joseph De Francis, a director of the board and executive vice president of MEC. "The pari-mutuel wagering industry is technology intensive and furthering our investment in this leading provider of wagering and gaming technology is an important strategic step for MEC." MEC's purchase price to acquire the remaining 70% of AmTote will be determined at the purchase option closing dates in accordance with the formula contained in AmTote's stockholders agreement. The closing of the first purchase option to acquire an additional 30% equity interest of AmTote will occur no later than Sept. 25. The closing of the second purchase option to acquire the remaining 40% equity interest will occur no later than Nov. 25, the company said. MEC also announced that Steve Keech, currently MEC's chief information officer, would be appointed the new president of AmTote. De Francis and Keech currently sit on the board of directors of AmTote. "MEC's investment in AmTote is not only an investment for MEC, but an investment for the pari-mutuel industry at large," De Francis said. "We intend to invest in the development of new technology and operate AmTote independently from MEC's racetracks, so that all participants in the pari-mutuel industry can benefit from advancements made by AmTote."
AmTote is a global provider of totalisator and wagering technology that has service contracts with more than 70 customers worldwide, including North American and international racetracks, sportsbooks, and online wagering entities. Amtote provides totalisator services to seven MEC racetracks as well as to MEC's online wagering companies.