The Australian-based casino games company Aristocrat has made a move to enter new markets, by acquiring Video Gaming Technologies (VGT) by its founder Jon Yarbrough, accordingly for a massive $1,28 billion.
VGT is the largest supplier of gaming machines for tribal casinos, with several hundred clients across the entire US. Overall VGT is estimated to have around 40% of the leased gaming machine market in the US, which is around 20,000 units. This means that Aristocrat will triple their current fleet of machines from 8,200 to around 28,400.
"This is a transformational transaction that delivers compelling strategic and financial benefits, particularly significantly increased scale in North America," Jamie Odell, CEO of Aristocrat Leisure said in a press-release. "Growing our share of this profit pool is a major strategic priority for Aristocrat."
Aristocrat will be paying for the deal through a raise in capital to around AUD$375 million and a refinanced debt of $1,3 billion. Last year's result for Aristocrat showed a AUD$188 million profit before tax, while VGT showed a $167 million in profits before tax and EBITDA.