NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR FROM THE UNITED STATES OR ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION.

FOR IMMEDIATE RELEASE.

1 December 2020

Sportech plc

("Sportech", the "Company" or the "Group")

Proposed disposal of the Global Tote business

Further to its announcement yesterday, Sportech, an international betting technology business, is pleased to announce that it has entered into a conditional agreement to sell its Global Tote business to Betmakers Technology Group Ltd ("BetMakers") (the "Disposal"), for a total cash consideration of £30.9 million (the "Consideration"), subject to an adjustment to reflect the level of working capital in and the valuation of the US defined benefit pension liability attributable to the Global Tote business at completion of the Disposal ("Completion").

The Global Tote business provides pari-mutuel technology solutions and services to gaming businesses around the world, predominantly to the global horseracing betting industry. Its systems processed approximately US$12.2 billion in betting handle in the financial year ended 31 December 2019 for clients across 37 countries.

Highlights

·    Agreement signed to sell the Global Tote business for a total cash consideration of £30.9 million, conditional upon approval of the Disposal by Sportech's shareholders and BetMakers receiving relevant regulatory approvals prior to Completion.

·    The current estimated US defined benefit pension liability attributable to the Global Tote business is approximately £1.0 million.

·    An initial cash amount, representing 20 per cent. of the Consideration, is payable upon approval of the Disposal from Sportech's shareholders and is non-refundable.

·    The remaining Consideration is payable in cash upon Completion.

·    It is Sportech's board of directors' (the "Board") current intention to return the majority of the proceeds to the Company's shareholders when the Board considers it opportune to do so. The timing and extent of any such return will take into account the Group's organic and inorganic investment opportunities, as well as the Group's general ongoing capital requirements, in light of plausible trading scenarios.

·    The Disposal is classified as a Class 1 transaction as defined by Chapter 10 of the FCA's Listing Rules. In addition, the Company is in an offer period (as defined in the City Code on Takeovers and Mergers (the "Code")) as a result of the possible cash offer for the Company by Standard General L.P. announced on 5 November 2020 (the "Possible Offer"). The Disposal may, therefore, require shareholder approval pursuant to Rule 21.1 of the Code. As such, a circular containing further details of the Disposal and a notice of a general meeting to approve the Disposal for the purposes of the Listing Rules and the Code will be sent to Sportech's shareholders in due course.

·    Subject to the conditions being satisfied, the Board expects the Disposal to complete in H1 2021.

·    The Board considers the terms of the Disposal to be in the best interests of the Company and its shareholders. Accordingly, the Board intends to unanimously recommend that shareholders vote in favour of the resolution to approve the Disposal.

In the year ended 31 December 2019, the Global Tote business generated revenue of £30.8 million, adjusted EBITDA of £5.6 million and a loss before tax of £0.8 million. As at 31 December 2019, the Global Tote business had gross assets of £30.1 million. For the six months ended 30 June 2020, the Global Tote business generated revenue of £12.0 million, adjusted EBITDA of £1.6 million and a loss before tax of £1.2 million. As at 30 June 2020, the Global Tote business had gross assets of £29.3 million.

Given the historically low level of prevailing interest rates available on cash deposits, the sale of the Global Tote business will be earnings dilutive to the Group in the short term. However, the Board believes that over the medium to long term, the Disposal will improve total shareholder returns as a result of the potential use of proceeds.

Following the Disposal, the Group will comprise of the following businesses:

·    Venues: The Venues business operates legal betting on horseracing, greyhound racing and Jai alai under an in-perpetuity licence in the State of Connecticut, USA. It offers omni-channel betting entertainment through 12 physical retail locations and an online platform, www.mywinners.com, and holds the right to expand to up to 24 physical locations. The business also includes a separate US retail "B2C" platform and provides venue management services to a range of clients.

·    Lottery: The Lottery business provides draw-based lottery platforms and services. In 2019, the Group acquired Lot.to systems, an iLottery, CRM, and games management platform, to complement the Group's successful draw-based games.

·    Bump 50:50: The Bump 50:50 business supplies in-stadia, web and mobile electronic lotteries to major league sports teams, collegiate sports organisations, and entertainment venues. In 2019, the Bump 50:50 business began to acquire clients from the non-sport philanthropy segment with deployments of its online raffles. As of 30 June 2020, the Bump 50:50 business had 135 clients in the US and Canada, across approximately 20 US states and Canadian provinces.

The Disposal is classified as a Class 1 transaction as defined by Chapter 10 of the FCA's Listing Rules. As such, the Disposal will be conditional upon shareholder approval at a general meeting. The Company expects to publish a circular (the "Circular") setting out further details of the Disposal and convening a general meeting to approve the transaction (the "General Meeting") in due course. The Board considers the terms of the Disposal to be in the best interests of the Company and its shareholders. Accordingly, the Board intends to unanimously recommend that shareholders vote in favour of the resolution to approve the Disposal at the General Meeting.

In accordance with the requirements of Note 1 on Rule 21.1 of the Code, the Circular will also provide further details on the status of the Possible Offer as at the date of circulation of the Circular. As a result of the Possible Offer, Sportech is in an offer period (as defined in the Code) and the Disposal is, therefore, also conditional upon either (i) shareholder approval at the General Meeting for the purposes of Rule 21.1 of the Code, or (ii) the current offer period ending prior to the date of the General Meeting.

Completion is conditional on BetMakers receiving or, where appropriate, waiving approval to transfer the relevant licences required for the operation of the Global Tote business.  As is customary for transactions of this type, BetMakers can terminate the agreement in the event of a material adverse change (MAC) in the Global Tote business. If the agreement is terminated after payment of the 20 per cent. initial cash payment, such payment does not become refundable.

Subject to the conditions being satisfied, the Board expects the Disposal to complete in H1 2021.

Commenting on the Disposal, Sportech's CEO, Richard McGuire, said:

"We previously set out that one of the Group's transformation objectives included evaluating and executing material corporate opportunities which deliver tangible investor returns. The Board believe this transaction very much achieves that objective. In addition to the range of opportunities which the net proceeds are expected to provide to the Group, we believe the BetMakers product suite will further enhance the existing Sportech platform providing additional opportunities for global gaming clients."

Commenting on the proposed transaction, BetMakers CEO, Todd Buckingham said:

"BetMakers' proposed acquisition of Sportech's Global Tote business is part of our company's international expansion plans to help power the excitement, growth and sustainability of horse racing globally. We consider the Sportech name to be synonymous with racing around the world, and we believe that BetMakers has the complementary knowledge and assets - and shared values built around a passion for racing - to help deliver ongoing success for clients, partners and all stakeholders in the racing industry. It is BetMakers' intention to retain all staff working in the Global Tote business and make significant investments into the business operations to keep up with the fast-moving sports betting industry. We are excited not only to be a partner that sustains racing through innovation in technology, services and solutions in the existing Sportech footprint, but also to pursue the growth opportunities that are being presented as new regulated markets open up such as the U.S."

About BetMakers

Betmakers Technology Group Ltd is an Australian company listed on the Australian Securities Exchange. BetMakers designs and develops odds comparison and intelligent betting platforms as well as providing analytics and trading solutions. As at 30 November 2020 (being the latest practicable date prior to the publication of this announcement), BetMakers had a market capitalisation of approximately AU$400 million.

Publication on website

A copy of this announcement is also available on the Group's website at www.sportechplc.com.

For further information, please contact:

This announcement contains inside information within the meaning of the Market Abuse Regulation. The person responsible for arranging release of this announcement on behalf of Sportech Plc is Richard McGuire, Chief Executive Officer.

Peel Hunt LLP ("Peel Hunt"), which is authorised and regulated by the Financial Conduct Authority in the United Kingdom, is acting exclusively as sponsor and corporate broker to Sportech and no one else in connection with the Disposal and will not regard any other person as a client in relation to the Disposal, nor be responsible to anyone other than Sportech for providing the protections afforded to clients of Peel Hunt nor for providing advice in relation to the Disposal, the contents of this announcement or any transaction, arrangement or other matter referred to in this announcement.

Forward-looking statements

This announcement contains statements which are, or may be deemed to be, "forward‑looking statements" which are prospective in nature. All statements other than statements of historical fact are forward-looking statements. They are based on current expectations and projections about future events, and are therefore subject to risks and uncertainties which could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements. Often, but not always, forward‑looking statements can be identified by the use of a date in the future or forward‑looking words such as "plans", "expects", "is expected", "is subject to", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", "believes", "targets", "aims", "projects" or words or terms of similar substance or the negative of those terms, as well as variations of such words and phrases or statements that certain actions, events or results "may", "could", "should", "would", "might" or "will" be taken, occur or be achieved. Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations or events that are beyond Sportech's control.

Forward-looking statements include statements regarding the intentions, beliefs or current expectations of Sportech concerning, without limitation: (i) future capital expenditures, expenses, revenues, earnings, synergies, economic performance, indebtedness, financial condition, dividend policy, losses and future prospects; (ii) business and management strategies and the expansion and growth of the Sportech Group's operations; and (iii) the effects of global economic conditions on Sportech's business.

Such forward-looking statements involve known and unknown risks and uncertainties that could significantly affect expected results and are based on certain key assumptions. Many factors may cause the actual results, performance or achievements of Sportech to be materially different from any future results, performance or achievements expressed or implied by the forward‑looking statements. Important factors that could cause the actual results, performance or achievements of Sportech to differ materially from the expectations of Sportech include, among other things, general business and economic conditions globally, industry trends, competition, changes in government and other regulation (including licensing) and policy, including in relation to the environment, health and safety and taxation, labour relations and work stoppages, interest rates and currency fluctuations, changes in its business strategy, the outcome of any litigation, the impact of any acquisitions or similar transactions, IT system and technology failures, political and economic uncertainty and other factors. Such forward-looking statements should therefore be construed in light of such factors.

Neither Sportech nor any of its directors, officers or advisers provides any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this announcement will actually occur. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof.

Forward-looking statements contained in this announcement apply only as at the date of this announcement. Other than in accordance with its legal or regulatory obligations (including under the Listing Rules and the Disclosure Guidance and Transparency Rules), Sportech is not under any obligation and Sportech expressly disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

The release, publication or distribution of this announcement in jurisdictions other than the United Kingdom may be restricted by law and therefore any persons who are subject to the laws of any jurisdiction other than the United Kingdom should inform themselves about, and observe, any applicable requirements. This announcement has been prepared for the purposes of complying with the Listing Rules and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with laws and regulations of any jurisdiction outside of England.

This announcement is not intended to, and does not constitute, or form part of, any offer to sell or an invitation to purchase or subscribe for any securities or a solicitation of any vote or approval in any jurisdiction. Shareholders are advised to read carefully the formal documentation in relation to the Disposal once it has been despatched. Any response to the proposals should be made only on the basis of the information in the formal documentation to follow.