The Tabcorp Holdings Limited (ASX: TAH) share price is edging higher today following the sale of the company's eBet business.
At the time of writing, the gambling company's shares are up 1.54% to 99 cents.
Also heading north is the benchmark S&P/ASX 200 Index (ASX: XJO) which is 0.92% higher after Wall Street snapped its two-day losing streak.
Tabcorp divests eBet business
Investors are bidding up the Tabcorp share price after the company provided a gaming services strategic update today.
According to its release, Tabcorp advised it has entered into an agreement to sell eBet to Venue Digital Technology.
Under the deal, Tabcorp will receive $62 million in cash less working capital and other minor adjustments.
eBet provides loyalty and tracking systems for gaming venues across Victoria and New South Wales. In the financial year ending 30 June, the group generated an EBITDA of $4.4 million and an EBIT loss of $2 million.
Tabcorp said that the sale is expected to be completed by the end of the first half of FY 2023, subject to the usual customary conditions.
Once the sale is finalised, this will result in a pre-tax gain of approximately $39 million.
In addition, Tabcorp confirmed the details of a new exclusive Tasmanian Monitoring Operator Licence awarded to Max Regulatory Services (MRS).
This will monitor all electronic gaming machines in hotels and licensed clubs in Tasmania.
The licence is for a 20-year period commencing 1 July 2023.
Tabcorp managing director and CEO, Adam Rytenskild commented:
The transactions announced today allows us to simplify our Gaming Services business as we pivot to an integrity services model.
This continues the urgent implementation of Tabcorp's transformation strategy. We have strong momentum and bold ambitions to grow both our Wagering & Media and Gaming Services businesses.
The potential sale of eBet was disclosed at the release of our FY22 results and we are pleased to have entered into the agreement swiftly and in line with our new strategic direction.
Tabcorp share price snapshot
Extreme market volatility has led the Tabcorp share price on a rollercoaster over the past 12 months. Its shares are up 8%.
For context, the S&P/ASX 200 Consumer Discretionary (ASX: XDJ) sector is down 18% over the same time period.
Tabcorp commands a market capitalisation of about $2.17 billion
