Scientific Games Corporation announced that it has completed the
acquisition of Tech Art, the gaming industry’s leading supplier of hole-card readers for blackjack.
The company first announced the deal in October. The acquisition will bring with tit the innovative MAXTime 4H
product, a combination of a blackjack hole-card reader and chip tray, as well as the proprietary table games Super Fun 21and Bet the Bust.
The MAXTime 4H product specifically will help casinos across the world increase play speed and enhance the security of blackjack games, according to the company.
“We are excited to welcome Tech Art into the Scientific Games family,” said Derik Mooberry, Scientific Games’ group chief executive, gaming. “This acquisition is yet another example of our continued investment in solutions that help the company better partner with our casino customers and offer the broadest portfolio of innovative products in the industry.”
Tech Art, founded in 1989, has been credited with inventing the so-called MAXTime device, a system said to improve security when dealing blackjack. According to the Scientific Games, this device is in use on more than 11,000 gaming tables worldwide.
The acquisition follows the closing of Scientific Games’ acquisition of sports betting platform supplier NYX Gaming Group Ltd., a deal which was lauded last week by Brokerage Deutsche Bank Securities.
“We view the decision to acquire NYX favorably, especially in light of the more recent traction towards the elimination of PASPA and the potential for broader based legalized sports book wagering,” said analysts Carlo Santarelli and Danny Valoy in a Monday note referring to the Professional and Amateur Sports Protection Act, the federal U.S. sports betting ban many feel will be overturned or repealed this year.
In the memo, the Deutsche Bank team raised the earnings estimates for Scientific Games.
“We anticipate a largely sound fourth quarter 2017 report, driven by solid gaming segment performance, continued margin traction, and December strength in the domestic lottery segment,” said the analysts. “Our fourth quarter 2017 AEBITDA [attributable earnings before interest, taxation, depreciation and amortization] estimate is US$317 million (US$307 million prior).”
In other company news, Scientific Games released its fourth-quarter and year-end revenue highlights. As it looks at the possibility of refinancing debt to take advantage of strong market conditions, preliminary fourth quarter results show narrowed losses and growth in both revenue and EBITDA.
Fourth quarter and full year growth reflect SGMS’ focus on generating top-line growth and ongoing improvements across its gaming, lottery and interactive segments, CEO Kevin Sheehan said. SGMS forecasted net loss for the quarter is inclusive of about $28 million in projected restructuring charges, which primarily includes costs from the NYX Gaming acquisition.
SGMS is looking to possibility refinance its $1.4 billion in 7 percent senior secured notes due 2022 and $185 million of borrowings under its revolving credit facility with a combination of new senior secured term loans and senior notes and $300 million in new senior unsecured notes.
Full results will be released February 28.
Below are SGMS projected results compared to the prior year:
FOURTH QUARTER HIGHLIGHTS:
Net loss: ($40 million to $50 million) vs. ($111 million)
Revenue: $820 million to $825 million vs. $752 million
Attributable EBITDA: $320 million to $325 million vs. $294 million
YEAR-END HIGHLIGHTS:
Net loss: ($238 million to $248 million) vs. ($354 million)
Revenue: $3.081 billion to $3.086 billion vs. $2.883 billion
Attributable EBITDA: $1.220 billion to $1.225 billion vs. $1.104 billion
