Global Cash to buy slot machine maker Multimedia Games (updated)

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08/09/2014 13:46

(Adds details, share movement) 
    Sept 8 (Reuters) - Global Cash Access Holdings Inc  GCA.N , 
which provides cash services to casinos, said it would buy slot 
machine maker Multimedia Games Holding Co Inc  MGAM.O  for about 
$1.2 billion to strengthen its gaming business. 
    The offer price of $36.50 per share represents a premium of 
31 percent to Multimedia's Friday closing. Multimedia Games' 
stock was trading at $36 before the bell on Monday. 
    "The acquisition of Multimedia Games ... uniquely positions 
GCA as an important strategic partner to gaming operators," 
Global Cash Chief Executive Ram Chary wrote in the statement. 
    The deal will help Global Cash increase its gaming offerings 
to existing casino customers. Multimedia Games, based in Austin, 
Texas, makes slot machines and slot games such as "Patriot" and 
"Double Dash Money". 
    Las Vegas-based Global Cash provides services such as cash 
advance, ATM cash withdrawals, and check services to companies 
in the gaming industry in addition to selling slot machines and 
jackpot kiosks. 
    M&A activity in the casino and gaming industry has spiked in 
the last few months. 
    In August, Australian gaming mogul James Packer took another 
crack at the lucrative U.S. casino market, with his Crown 
Resorts Ltd  CWN.AX  buying a vacant site on the famous Las 
Vegas Strip.  ID:nL4N0QA0H3  
    In the same month, U.S. slot machine maker Scientific Games 
Corp  SGMS.O  said it would buy larger rival Bally Technologies 
Inc  BYI.N  in a $3.27 billion deal.  ID:nL4N0Q748U  
    Also, in July  Italy's GTECH  GTCH.MI  had said it would buy 
U.S. slot machine maker International Game Technology  IGT.N  
for $6.4 billion.  ID:nL4N0PR1B0  
    The deal, expected to close in early 2015, will help GCA 
save about $30 million in costs and is estimated to generate 
about $800 million in revenues on a pro-forma basis. 
    Global Cash said it would finance the deal with cash on hand 
and debt, for which it has secured committed debt financing. 
    Multimedia Games' stock closed at $27.78 on the Nasdaq on 
Friday, while GCA's shares closed at $7.52 on the New York Stock 
Exchange. 
 
 (Reporting By Lehar Maan in Bangalore; Editing by Saumyadeb 
Chakrabarty) 
 ((lehar.maan@thomsonreuters.com, Within U.S. +1 646 223 8780, 
Outside U.S. +91 80 6749 6234, Reuters Messaging: 
lehar.maan.thomsonreuters.com@reuters.net;)) 
 
Keywords: MULTIMEDIA HLDG M&A/GLOBAL CASH