Ainsworth Game Technology (AGT) hopes a new acquisition will help bolster its numbers. The Australia-based company announced today that it is putting the final touches on a deal that will see it pick up U.S.-based MTD Gaming Inc through wholly-owned subsidiary Ainsworth Game Technology, Inc., the arm that controls operations in the U.S. The acquisition is worth a reported $26 million, provided certain criteria are met.
The international gaming equipment manufacturer has already turned over $13 million for the acquisition. The remaining $13 million will be paid in accordance with “the successful delivery of financial targets and contract renewals,” AGT said in a filing (in pdf) with the Australian Securities Exchange (ASX). The company indicates that MTD is a “proven supplier of premium” games for both the multi-game and video lottery terminal markets, and that it currently operates in Louisiana, Montana and South Dakota.
The company adds, “All necessary closing conditions have been completed enabling AGT to target these products utilizing the acquired assets throughout selected and established licensed jurisdictions. Initial opportunities for these products will be within restrictive gaming and other specific gaming venues in Nevada, California, Arizona and New Mexico, markets that currently have a combined market size of approximately 42,000 units.”
AGT is pulling funds from existing credit lines and cash reserves in order to cover the initial cost of the purchase, which should help the company put the brakes on a revenue slide. It reported a $2.64-million loss for the last half of 2019, primarily due to weaker sales in several areas. In North America, sales had dropped by 6% and Latin America saw a decline of 8%. In AGT’s own back yard, it managed to increase sales, but revenue dipped slightly.
AGT CEO Lawrence Levy states in the filing, “We are delighted to welcome MTD to Ainsworth. The acquisition marks another positive step in transitioning AGT to growth and improved profitability. MTD’s unique Poker and Keno games are a great fit with our existing Class II and Class III offerings in the U.S. and follows the global launch of our new A-Star cabinet hardware in February 2020. We expect to drive incremental revenues by offering these proven and highly successful games to customers in our established markets where Ainsworth operates, including California and Nevada.”
