Bally Technologies has entered into a definitive agreement to acquire SHFL Entertainment for US$1.3 billion.
In a deal Bally CEO Ramesh Srinivasan called “transformational,” the Las Vegas-based slot giant (NYSE: BYI) is paying $23.25 a share for SHFL’s Nasdaq-listed common stock, a 24% premium to Monday’s closing price.
Bally described the purchase, which both boards unanimously approved, as a combination of “two best-in-class, highly complementary and customer-centric technology companies with a shared commitment to innovation.”
Mr Srinivasan said, “SHFL’s intellectual property, renowned brands and industry-leading suite of diverse, high-performance products will enable us to … provide the most comprehensive product portfolio offered around the world.”
SHFL CEO Gavin Isaacs said it is “the right time to join forces”.
He called it “a unique opportunity to combine each other’s many strengths, particularly our talented teams who have been the key drivers of success for each organization. … We share a common vision to build the industry’s leading supplier based on delivering superior products, solutions and services to customers around the world.”
The acquisition significantly broadens Bally’s reach into growth markets outside the US, particularly in the land-based and online table games and e-tables sectors of Asia and Australia. At the same time, it eliminates an increasingly competitive rival for its share of the domestic slot machine market.
The company said it has “committed financing” to complete the acquisition, whose enterprise value includes $8 million of SHFL debt and cash reserves of $41 million.
Bally estimates trailing 12-month EBITDA of $415 million from their combined operations, based on about $ 1.3 billion in total revenues, of which $644 million is recurring. Bally said it also expects to achieve synergies of at least $30 million.
SHFL said it expects closing will occur no later than June 2014, pending approval by the company’s shareholders and regulatory approvals.
