Global Cash Access To Buy Multimedia Games For $1.2 Bln - Update

(RTTNews) - Global Cash Access Holdings, Inc. (GCA) Monday said it has entered into a merger agreement to acquire all the outstanding stock of Multimedia Games Holding Co., Inc. (MGAM) for $36.50 per share or about $1.2 billion in cash. The transaction is expected to immediately add to GCA's earnings.

The shares of Multimedia Games climbed about 29 percent in pre-market trading.

The purchase price represents a premium of 31 percent to the company's closing stock price as of September 5. The boards of directors of both the companies have unanimously approved the transaction.

The merger is expected to achieve about $30 million of synergies as a combined entity. On a pro-forma basis, it is estimated to generate about $800 million in revenues and around $217 million in adjusted EBITDA.

Global Cash Access provides cash access services and related equipment and services to the gaming industry. Austin, Texas-based Multimedia Games develops gaming technology.

GCA noted that the acquisition of Multimedia Games uniquely positions it as an important strategic partner to gaming operators by offering them solutions across their entire gaming floor.

The proposed acquisition, which is currently expected to be completed in early 2015, is subject to customary closing conditions, including receipt of Multimedia Games shareholder approval and antitrust and gaming regulatory approvals.

Ram Chary, president and chief executive officer of Global Cash Access stated, "This acquisition further strengthens and broadens GCA's portfolio of solutions, which has been embraced by our customer base."

Upon completion of the transaction, Chary will continue to serve as president and chief executive officer of Global Cash Access.

The combined company's headquarters will remain in Las Vegas, Nevada, and its game development operations will be based in Austin, Texas.

Global Cash Access said the proposed acquisition will be financed with debt and cash on hand, for which it has secured committed debt financing.

BofA Merrill Lynch and Deutsche Bank have agreed to provide committed debt financing to Global Cash Access for the proposed acquisition.

GCA closed Friday's trading at $7.52 on the NYSE.

Shares of Multimedia Games ended on Friday at $27.78 on the Nasdaq. In the pre-market activity on Monday, the stock climbed 28.65 percent to trade at $35.74.