Youbet buying United Tote

Youbet.com Inc.has announced that it entered into a definitive agreement to acquire privately-held United Tote Company for approximately $34.2 million in cash. Youbet expects to fund the purchase price and additional capital needs of the company with cash on hand and expected proceeds from an equity financing pursuant to the company’s effective shelf registration statement and a new loan facility that will be used to refinance approximately $14.4 million of secured debt (primarily related to the financing of equipment that is leased to United Tote’s track customers).



The acquisition is expected to close within the next 60 days, subject to a financing contingency and other customary closing conditions.



Founded in 1959, United Tote is a leading supplier of totalizator systems, terminals and other pari-mutuel wagering services that process more than $7 billion in handle (wagers) annually on a global basis, approximately 90 percent of which is North American pari-mutuel handle. United Tote supplies pari-mutuel tote services to approximately 94 racing facilities in North America, including Churchill Downs and New York Racing Association (NYRA) tracks, and 11 facilities in Korea, Mexico, Spain and other foreign markets.



Commenting on the transaction, Youbet Chairman, President and CEO Charles F. Champion, stated, “This is an excellent strategic and financial opportunity for Youbet, as it advances our efforts to be an end-to-end technology provider for the pari-mutuel industry, further diversifies our product offerings and sources of revenue, and is expected to be accretive to our fiscal 2006 operating results. By acquiring United Tote, we expect to benefit from their increasing market share in providing tote services and products that are considered by many in the pari-mutuel wagering industry to be the most advanced in the market.�



Champion continued, “Strategically, we are also attracted to the additional products and platform offerings being developed by United Tote. We believe that United Tote’s game content, such as their innovative racing and sports contest offerings, have many potential applications beyond the markets in which they are currently deployed. Accordingly, we expect that Youbet will benefit from significant near- and long-term synergies and provide further revenue diversification through new entertainment products, terminal and kiosk distribution channels and established global customer relationships, including those in key growth markets for Youbet."

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