Australian gaming supplier Aristocrat Leisure has completed the US$1.3bn acquisition of North American-based gaming machine manufacturer Video Gaming Technologies (VGT). Having announced the strategic deal earlier this year in July, Aristocrat said that it had now achieved all necessary regulatory and other approvals required with respect to the acquisition.
Headquartered in Tennessee, VGT is a leading provider of predominately Class II gaming machines for the leased tribal gaming market in North America, with an installed base of approximately 20,200 leased machines.
Aristocrat said that VGT will be run as a business unit, recognising its success and the benefit of maintaining its focus on Class II products and customer service.
The company has put in place an interim leadership structure while a “rigorous” global search for a permanent leader is undertaken.
Aristocrat CEO and managing director Jamie Odell said that the fact that it had achieved completion of this transaction with no delays speaks to the fact that both VGT and Aristocrat are “reputable, high compliance businesses with constructive regulator relationships.”
“It also demonstrates the level of support for this transaction across both Aristocrat and VGT, and among our customers, which gives me further confidence in its fundamental soundness,” he said.
Odell believes that the acquisition is a “strategically and financially compelling” opportunity for both businesses.
“VGT brings a complementary product offering to Aristocrat and will immediately step change our scale, and significantly accelerate our growth, in the critical US recurring revenue segment. 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 US for sale and recurring revenue segments.”
Odell said that the transaction is highly cash flow generative, with the acquired free cash flows also allowing Aristocrat to consider further accretive investments in digital and other organic and inorganic opportunities over the medium term to sustain growth.
“We are delighted to welcome VGT into the Aristocrat family, and look forward to working together to deliver our full potential for the benefit of Aristocrat shareholders, and all of our stakeholders,” said Odell.
VGT has the largest Class II platform of installed gaming machines in North America, and manufactures both mechanical and video Class II gaming machines.
The majority of VGT’s installed base is located in the Oklahoma tribal gaming market, which accounts for approximately 50 per cent of the total installed base of Class II gaming machines in the US. VGT has also expanded into the Washington and California markets. Last year the company generated revenue of $236m, with adjusted EBITDA of $157m.
source : www.gamingintelligence.com