The year is just barely underway and cash handling company Everi Holdings is looking to start off strong. The company, which provides customer service kiosks and electronic game content for casinos, has inked a deal to purchase a small Las Vegas-based company for a big chunk of change. According to a filing with NASDAQ at the beginning of this week, Everi is going to pay $25 million to acquire assets belonging to Micro Gaming Technologies, Inc. (MGT).
MGT is behind, among other things, software that is used to track and report casino patron campaigns, as well as to automate their delivery. It received $15 million up front from Everi for its assets the day before Christmas, and another $5 million will be handed over on April 1 of this year. After that, on December 24 of next year, another $5 million will be paid. All the future payments are expected to be covered by anticipated sales and/or cash on hand, according to Everi.
There hasn’t been a lot of detail provided regarding exactly what assets Everi would acquire from MGT. Everi released a press release on the subject of the deal, stating, “MGT’s products, software and technologies for casino operators represent an attractive, complementary addition to Everi’s portfolio of fintech [financial technology] products and services. The acquisition also provides Everi with a portfolio of customer locations where MGT’s solutions are currently installed, including at properties of many key Everi customers.”
Everi shouldn’t have too much difficulty meeting its financial obligations. It is capitalizing on continued growth to secure the transaction, and its confidence in the ability to cover its payments is well-founded. In 2017, the company reported a net loss of $4.3 million for the third quarter. However, since then, it has turned everything around and, in the third quarter of 2018, saw a profit of $2.1 million. For the same quarter last year, Everi reported net income of $9.3 million to keep its winning streak alive.
That upward climb will most likely be bolstered by another recent deal Everi made. In November of last year, Scientific Games announced a partnership with the company that will see the two launch iGaming in several jurisdictions, including Europe, Canada and New Jersey.
The executive VP for Everi, Darren Simmons, said in the press release about the MGT deal, “We see a significant opportunity for growth in the player loyalty market and the planned acquisition of the MGT assets represents a significant step forward in our goal to establish loyalty and marketing-based services as a meaningful growth driver for our business,” adding, “We see a significant opportunity for growth in the player loyalty market,” and the acquisition of the assets represented “a significant step forward in our goal to establish loyalty and marketing-based services as a meaningful growth driver for our business.”
