Business
A new bet at GTECH
01:00 AM EDT on Friday, May 4, 2007

PROVIDENCE — W. Bruce Turner relinquished his role as president of GTECH Holdings Corp. yesterday, in the first major leadership change since Italian lottery operator Lottomatica SpA acquired the company last August and named Turner chief executive officer of the combined entity.
Turner remains GTECH’s chief executive, but the day-to-day management of Lottomatica’s largest division will be led by Jaymin B. Patel, a longtime executive who will hold the titles of president and chief operating officer, a new position at the Providence-based company.
Patel, who joined GTECH in 1994, had been the chief financial officer of GTECH and its parent company. He was born in England and previously worked at PricewaterhouseCoopers in London.
“I’ll be responsible for driving the growth of the GTECH business,” Patel said yesterday by phone from Lottomatica’s headquarters in Rome. “It’s a very exciting role.”
Patel will continue to report to Turner, who works in Providence. But a range of GTECH marketing and technology managers, plus senior vice presidents of operations, now answer to Patel.
The reorganization frees Turner to manage customer and investor relations and to pursue potential acquisitions, he said. Since last summer, he has maintained a demanding travel schedule, frequently flying to Italy and to countries that rely on GTECH’s technology and management for their lotteries.
“It affords him the opportunity to focus on more strategic matters in the areas of business development and driving our growth strategy,” GTECH spokesman Robert Vincent said.
Lottomatica, the world’s largest lottery operator, also announced yesterday that it had appointed Stefano Bortoli, chief executive officer of its Italian operations, as CFO of the parent company, replacing Patel. Lottomatica is expected to name individual CFOs for GTECH and the Italian operation.
On Monday, Bortoli will start his new role, making him the highest-ranking Lottomatica executive to be dispatched permanently to Providence.
Yesterday, he said he feared the New England winter, which he experienced during monthly business trips since September. But he said he planned to buy a house in Rhode Island for him and his wife, Antonella, and their 8-year-old son, Sebastiano.
“I’ve been there and I like it,” he said. “The environment is very attractive to me, and I’ve been very much welcome by everyone in the organization.”
Bortoli is not the first high-level Italian executive to move into the Providence headquarters, home to a multicultural management team that oversees GTECH’s global empire from the company’s new downtown high-rise.
Rather than a tightening of the reins, however, the newest moves seem to further underline the importance of GTECH to its corporate parent.
Despite originating in Italy, a conference call yesterday announcing the personnel changes was held in English, with the Beatles providing the hold music. In January, the company’s global kickoff meeting was held in Rhode Island, with top Lottomatica executives traveling to The Westin Providence for meetings and to the Rhode Island School of Design Museum for dinner.
The parent company’s chief administrative officer, Walter G. DeSocio, is a former GTECH executive who continues to work in Rhode Island.
Providence-based staff, however, have also visited Italy regularly for joint projects, and all employees have had to adjust to cultural differences, Vincent said.
Lottomatica executives insist on neckties, for example, whereas their Rhode Island counterparts favor business casual. GTECH managers have surprised Lottomatica staff by scheduling meetings more than a year in advance.
But the integration has gone smoothly, Vincent said, aided by Rhode Island’s Italian-American character.
In discussing Bortoli’s promotion yesterday, Turner said the importing of foreign talent was strengthening the company.
“The merging of cultures is going just fine. The more international flavor that I can bring to Rhode Island is good,” Turner said. “There’s always a little bit lost in translation. People nod and say they understand, but they don’t always understand.”
“We operate in so many countries and cultures,” Patel added. “We can’t afford to have a management team with a homogenous perspective.”
In financial terms, at least, the merger of the companies has so far proved profitable.
Lottomatica said yesterday that its first-quarter revenue grew 128 percent, compared with the first three months of last year, before the GTECH acquisition. In all, Lottomatica revenue jumped to $590 million, from $257.5 million. GTECH sales accounted for $304 million of that total, with Lottomatica generating $286 million.
The increase in profits was less dramatic, in part due to continued expenses stemming from the $4.8-billion acquisition. Lottomatica paid $4.65 billion in cash and assumed GTECH’s $180-million debt. Lottomatica said its first-quarter profit rose to $61 million, from $56 million, a 9-percent increase.
Lottomatica is projecting strong revenue for the rest of the year, in large part from growth in GTECH’s earnings.
In the first quarter, GTECH launched a network in Colombia to provide banking services through a partnership with Citibank; extended its contract with the New York Lottery; and won contracts to provide instant-ticket vending machines to Missouri and Massachusetts. The three lottery contracts alone are worth $224 million, GTECH said.
The first quarter of 2007 is the second full quarter since the acquisition. Lottomatica announced its earnings on the first day of a two-day quarterly meeting of its board of directors.
“I am pleased to report that we experienced solid progress in all of our businesses,” Patel said in the conference call with analysts, his last as CFO. “Our performance has exceeded our initial expectations.”
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