Global Cash Access Holdings Inc., a provider of cash solutions to the casino industry, agreed to acquire Multimedia Games Holding Co. for $1.2 billion in cash, gaining a creator of electronic-gaming units to American Indian casinos and lotteries.
The transaction values Multimedia at $36.50 a share, a 31 percent premium to its closing price Sept. 5. The deal will be financed with debt and cash on hand, Las Vegas-based GCA said in a statement.
GCA provides casino customers access to cash through ATMs, point-of-sale and debit-card transactions as well and offers slot-machine ticket redemption and jackpot kiosks. The company processes about 90 million transactions annually, dispensing more than $19 billion in cash, according to its website. Austin, Texas-based Multimedia is a creator and supplier of systems, content and electronic gaming units and as of September 2013 had 205 gaming licenses in 29 U.S. states, according to its most recent annual filing.
The deal is expected to create about $30 million in synergies and to generate about $800 million in revenue based on the 12 months through June 30 and $217 million in adjusted earnings before interest taxes, depreciation and amortization.
Bank of America Corp.s Merrill Lynch is providing financial advice to GCA and Pillsbury Winthrop Shaw Pittman and DLA Piper are giving legal counsel. Wells Fargo & Co is providing financial advice to Multimedia and Latham & Watkins is giving legal counsel. The transaction is expected to close in early 2015, pending regulatory approvals.
Multimedia rose 29 percent to $35.80 at 8:28 a.m. New York time. GCA rose 6.1 percent to $7.98.