GTECH selling AmTote division to local company Union official says buyers are from Clendenin Bros.

February 24, 1996|By Jay Hancock | Jay Hancock,SUN STAFF

GTECH Holdings Corp. is expected to announce Monday that it has sold its Maryland-based AmTote International division to a private concern backed at least in part by local investors, a union official said yesterday.

GTECH has been trying to sell AmTote -- which employs roughly 500 people nationwide and makes, leases and maintains racetrack betting equipment -- for almost a year.

Yesterday, it was close to completing a sale to a company tied to the people who own Baltimore-based manufacturer Clendenin Brothers Inc., said Dion F. Guthrie, president of a union local that represents AmTote workers.

The deal apparently will keep AmTote and roughly 200 local jobs in Maryland, Mr. Guthrie said.

Officials at GTECH and Clendenin, which makes nails, other fasteners and washers, declined to confirm the deal or otherwise comment yesterday.

"The company has not made an official announcement concerning the sale of AmTote," said GTECH spokesman Steve White.

A spokeswoman for Clendenin executives John and James Corckran said, "There's no association" between Clendenin and AmTote.

AmTote workers have been told to report to a Monday meeting, which is expected to be about the sale, Mr. Guthrie said, and AmTote managers have been told that the buyers are the Corckrans and an executive named Ted Mudge.

"Everything's been signed, sealed and delivered," Mr. Guthrie said.

The sale will take effect at midnight tonight, he added.

Mr. Guthrie is president of Local 1501 of the International Brotherhood of Electrical Workers.

Mr. Mudge, who is expected to be AmTote's chief executive, did not return phone calls to his AmTote office yesterday.

GTECH, which makes on-line lottery equipment, bought AmTote from General Instrument Corp. a few years ago.

But GTECH's hope of using AmTote to build sales in the "video lottery" business at racetrack sites didn't work as planned, said Bruce Turner, a financial analyst who follows GTECH for Salomon Brothers in New York.

GTECH said last March that it would try to find a buyer for AmTote, which also serves off-track betting parlors. It's not surprising that the deal didn't happen for almost a year, Mr. Turner said.

"There aren't many buyers for that type of business," he said. "There is a business there, but it's probably best run by a small, private firm that can run it as a specialty niche business."

AmTote has been cutting its management staff but hasn't eliminated union jobs, Mr. Guthrie said. The company signed a five-year lease on its Hunt Valley headquarters in 1994, he said.

GTECH is a publicly traded company, but it doesn't supply separate sales and earnings figures for AmTote. The sale probably won't materially affect GTECH, Mr. Turner said.

AmTote's business has been "stable" but has "come down quite bit since GTECH purchased us," Mr. Guthrie said.

GTECH itself has hit a run of bad luck in recent years, losing key lottery contracts, including Maryland's, settling a shareholder lawsuit and making layoffs.

GTECH earned $900,000 on $695.1 million in sales for the fiscal year that ended in February 1995. The company has not yet reported earnings for the fiscal year that ends this month.

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