Austin-based Multimedia Games to buy electronic table games maker PokerTek for $13 million

Apr 30, 2014
Austin American Statesman

Austin-based gambling products company Multimedia Games Inc., which develops slot machines and operates in several markets throughout the country, said Wednesday it reached a $13 million deal to acquire North Carolina-based PokerTek, a maker of electronic table games

PokerTek provides electronic poker, blackjack and baccarat tables for casinos throughout the United States and in some international markets. One of its most popular models is the PokerPro, which the company calls the “world’s leading automated poker table.”

Electronic gaming tables have become a growing component for U.S. casinos, so the acquisition “represents an excellent opportunity for Multimedia Games to expand our product portfolio,” Multimedia Games CEO Patrick Ramsey said in a written statement

The move was lauded on Wall Street Wednesday, as shares rose nearly 10 percent in daily trading

Multimedia Games, which was founded in 1991 and went public five years later, has about 500 employees and operates in New York, California, Las Vegas and New Orleans markets, among others. The acquisition of PokerTek will add another 25 workers, company spokesman Rich Land said

The agreement calls for PokerTek shareholders to receive $1.35 per share, according to securities filings. While the boards of both Multimedia Games and Pokertek have voted to approve the deal, it still must be approved by Pokertek shareholders and federal regulators

PokerTek, which had revenue of $5.5 million in 2013, will become a wholly owned subsidiary of Multimedia Games if the deal is approved, according to securities filings

Multimedia Games also on Wednesday reported earnings for its fiscal second quarter. The company said its revenue grew 25 percent in the quarter, to $58.2 million. Net income for the quarter was $11 million, or 35 cents per share, the company said. Consensus analysts’ expectations had been for earnings of 31 cents per share

Multimedia Games also reaffirmed its guidance for the current fiscal year, saying it anticipates revenues of $217 million to $223 million, which would be year-over-year growth of 15 percent to 18 percent

By midday, Multimedia Games’ stock was up 7.1 percent to $28.57 per share. Shares closed up $2.54, or 9.5 percent, to $29.20 on the Nasdaq exchange. The 52-week range is $23.81 to $40.15

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