Boston, MA 09/09/2014 (wallstreetpr) – Casino industry footprint is always a plus point for any gaming business because of the huge amount of cash riding in gambling world. A new company jumping into the casino bandwagon is Global Cash Access Holdings, Inc. (NYSE:GCA). The company announced that it would be buying Multimedia Games Holding Company Inc (NASDAQ:MGAM) for spreading its tentacles into casino business.
About the transaction
Global Cash Access Holdings, Inc. (NYSE:GCA) will acquire Multimedia Games Holding Company Inc (NASDAQ:MGAM) in a transaction worth $1.2 billion.
Both these companies are manufacturers of machines that people find in casino floors. While GCA is the manufacturer of cash-advance kiosks and ATMs, Multimedia Games, on the other hand, manufactures video slot machines.
Las Vegas based Global Cash shall make a payment of $36.50 per share to Texas based Multimedia Games Holding Company Inc (NASDAQ:MGAM). This is a 31% premium for the Friday’s closing price of Multimedia Games.
As subject to customary regulations, the deal will close within first few months of 2015.
Huge Amount of Money Riding on Combined Company
Although, the details in regard to this deal have not been disclosed about the newly formed combined company, but it is expected that the new venture of Global Cash and Multimedia Games will be able to generate approximately $800 million on an annual basis. The earnings before amortization, depreciation, taxes and interest are expected to be approximately $217 million.
The shares of Global Cash Access Holdings, Inc. (NYSE:GCA) dropped down 3 cents on Monday, after the news. In the meanwhile, Multimedia Games Holding Company Inc (NASDAQ:MGAM) got a push to its shares, which climbed 30% on Monday.
Importance of Deal for Global Cash Access Holdings
The deal will offer great amount to benefit to Global Cash, which will be able to spread more in terms of casino business. Las Vegas, which offers huge and widespread industry for casino-related businesses, will allow Global Cash Access Holdings, Inc. (NYSE:GCA) to enjoy more revenue through newly generated and formed venture.
