(Adds deal and industry details, Aristocrat's market value)
SYDNEY, July 7 Australian gaming machine maker
Aristocrat Leisure Ltd has agreed to buy privately
owned U.S. peer Video Gaming Technologies (VGT) for $1.28
billion in a deal that will help Aristocrat grow in the United
The all-cash deal is likely to catapult Aristocrat to the
leading position in Native American casino gaming with a market
share of 31 percent, up from 5 percent now, the company said in
an investor presentation on Monday. Native American casinos
house about 40 percent of all gaming machines in the United
The deal comes as the gaming industry pursues consolidation
to combat slow growth. Another equipment maker, Las Vegas-based
International Game Technology, is exploring a sale
, and Aristocrat said revenue from VGT's
operations may give it sufficient firepower to consider
expansion in other parts of the world.
VGT, based in Franklin, Tennessee, makes slot machines
primarily for Native American casinos. VGT reported revenue of
$236 million for the year-ended December 2013.
Aristocrat said it will fund the acquisition and also
refinance existing debt through two new debt facilities worth
$1.3 billion and A$100 million ($93.44 million) respectively, as
well as an underwritten institutional share placement of A$375
million. Aristocrat shares were placed on a trading halt on
Monday pending the share placement's bookbuilding.
At $1.28 billion, VGT's price tag is close to half
Aristocrat's market value of A$2.98 billion ($2.79 billion) at
Friday's close. The Australian firm posted a net profit of
A$107.2 million for the full year ended September, up nearly 17
percent from a year ago.
($1 = 1.0702 Australian Dollars)
(Reporting by Swati Pandey; Editing by Eric Meijer and Kenneth