Gaming supplier Aristocrat Leisure Ltd on Tuesday announced it has completed the acquisition of U.S.-based gaming machine manufacturer Video Gaming Technologies Inc (VGT), in a deal worth US$1.28 billion. The Australian firm also said it would consider other “accretive opportunities”.
Aristocrat has “achieved all necessary regulatory and other approvals required with respect to its agreement to acquire” VGT, Aristocrat said in a filing to the Australian Securities Exchange.
VGT is a provider of gaming machines for the leased tribal gaming market in North America. The company, headquartered in Tennessee, had an installed base of approximately 20,200 leased machines at the end of last year, according to previous filings.
VGT will be run as a business unit of Aristocrat, maintaining its focus on Class II products, the Australian gaming manufacturer said.
Aristocrat has put in place an interim leadership structure “while a rigorous global search for a permanent leader is undertaken,” it said. The deal had first been announced in July.
“As I have noted previously, this is a strategically and financially compelling opportunity for both businesses,” Jamie Odell, chief executive of Aristocrat, said in the statement.
“VGT brings a complementary product offering to Aristocrat and will immediately step change our scale, and significantly accelerate our growth, in the critical U.S. recurring revenue segment,” he added.
At the Global Gaming Expo (G2E) 2014 in Las Vegas earlier this month, Mr Odell said it was “responsible” of gaming technology suppliers to consider consolidation in the face of reduced orders from U.S. casino operators.
“The addition of VGT comes at an ideal time for Aristocrat, and will build on the sustained operational momentum we have achieved in our core Class III business, particularly in key U.S. for sale and recurring revenue segments,” Aristocrat’s CEO said in Tuesday’s filing.
“This transaction is highly cash flow generative. As previously flagged, acquired free cash flows will also allow Aristocrat to consider further accretive investments in digital and other organic and inorganic opportunities over the medium term to sustain our growth,” Mr Odell added.
On October 1, Aristocrat announced it had completed the sale of its lottery business, involving EUR10.5 million (US$13.2 million) in cash, to online gaming software supplier Playtech Plc.
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