Everi Holdings Inc. the Nevada based slot machines and financial equipment provider, formerly known as Global Cash Access Holdings Inc., on Monday announced the acquisition of the privately held Micro Gaming Technologies Inc. (MGT) at the cost of $25 million.
MGT is also based in Nevada and develops software used by gaming companies to track various promotions. The company builds hardware and software that are used to design raffles, among other products.
The deal will require Everi to pay $15 million to acquire MGT, then another $5 million will be paid on April 2020, and the remaining amount to be settled by Dec 24, 2021.
In a statement, Everi Vice President Darren Simmons said that there is a significant chance for growth and that the acquisition of MGT is one of the steps forward to achieving their goal.
Evaluating Everi
In the stock exchange market, Everi shares increased by 55 percent in the fourth quarter of 2019. This represents a 158.48 percent growth on a year to date basis, making the company’s stock one of the best performing among the small gaming companies.
Earlier this month, Las Vegas-based Everi sold 10 million shares of stock, netting $107 million in proceeds in the process. Although the sale diluted the investors hold, the company has since then bounced back. The move was recommendable; the company is using $30 million of the capital it acquired to service its unsettled loan, and another 73 percent of the profit is obtained from the sale of shares to repay some seniors debts.
Stifel analyst Brad Boyer is also commending Everi for the move to acquire MGT:
“We remain constructive on EVRI shares on the other side of the recent equity raise, as we believe the deal accomplished two important items that should support further share price appreciation over the intermediate-to-longer term.”
Boyer believes the share offering was necessary so that the management can help to reduce its debt and also give investors a chance to add or acquire Everi shares at a favorable price.
According to Casino.org, Everi hasn’t announced when the deal will be finalized. Meanwhile, the loyalty programs and financial solutions services at gaming venues are growing. Boyer is optimistic about the position of Everi’s slots and fintech business. The analyst price the stock at $16 after the merger, which is a 19.4 percent ascent from the current price.
