AmTote up for sale, owner says

March 10, 1995|By Alec Matthew Klein | Alec Matthew Klein,Sun Staff Writer

Hunt Valley-based AmTote International is up for sale, its parent company said yesterday as it laid off 25 employees of the gambling equipment company as a prelude to a deal.

GTech Holdings Corp., the world's largest provider of computerized lottery systems, said yesterday that officials were negotiating with "several parties" to sell AmTote less than two years after it was acquired for $20.7 million.

The sale, officials said, will not affect AmTote's contractual commitments to lease betting ticket machines, infield tote boards and computer systems to pari-mutuel race tracks and off-track-betting parlors throughout the world, including Pimlico and Laurel race tracks in Maryland.

But several questions remained unanswered, including the possibility of further layoffs. "Today's announcement stands for itself," said company spokesman Robert J. Rendine. GTech's announcement of the planned sale did not cite layoffs at AmTote, but Mr. Rendine confirmed that about 25 employees got a pink slip yesterday. GTech did, however, announce that it would eliminate 126 positions apart from its subsidiary.

Asked whether AmTote would remain in Maryland, Mr. Rendine said, "I can't answer that question now. We don't know who the buyer is." Then he added: "I think it would be difficult to relocate" the company.

The uncertainty left employees "disheartened," said Dion F. Guthrie, president of local 1501 of the International Brotherhood of Electrical Workers, representing about 400 AmTote employees here and across the country. "They're worried about their jobs, they're worried about whether the company is going to survive. I'm concerned."

In a call at 7:30 a.m. yesterday, AmTote President William A. Saunders Jr. told Mr. Guthrie that the company is "trying to get down to fighting weight," the union official said. "And you know what that means. They're going to lay off a bunch of people."

AmTote officials declined comment. All employees laid off yesterday were nonunion management, Mr. Guthrie said.

The sale is part of GTech's continuing reorganization "designed to help us sharpen our focus and pay appropriate attention to our core growth business," Mr. Rendine said.

AmTote was losing about $1 million a month, according to the local union. AmTote's revenue figures were not available, GTech officials said.

"They cut bait," said William R. Schmitt, an analyst with Gerard Klauer Mattison in New York. "The AmTote acquisition wasn't working for them. It was dragging on their earnings."

GTech reported an after-tax charge of about $44.1 million for expenses associated with AmTote's sale, $6.1 million in after-tax losses from the subsidiary's operations for the fiscal year ending Feb. 24 and a pre-tax charge of about $5 million to write off video games already manufactured.

Despite AmTote costs, GTech derived at least one lucrative benefit: The subsidiary owned a small New York electronic benefits transfer business, which automates the distribution of food stamps and welfare benefits. That translated into a seven-year, $200 million GTech contract with the state of Texas.

Mr. Schmitt predicted higher earnings next fiscal year for the West Greenwich, R.I., company, which controls about a 70 percent share of the world-wide market of computerized lottery systems. GTech provides machines, software and computer services for the Maryland lottery, which generated $879 million in sales on 3,887 terminals in 1994.

There are about 150 employees at AmTote's headquarters and another 400 working at racetracks across the country, according to the local union.

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.