The transaction has been unanimously approved by the boards of directors of the two companies.
"The acquisition of Multimedia Games represents a gaming-relevant transformational opportunity to combine two companies with rich gaming heritages and uniquely positions GCA as an important strategic partner to gaming operators by offering them deeper and more integrated solutions across their entire gaming floor," remarked Ram V. Chary, President and Chief Executive Officer of GCA.
"This acquisition further strengthens and broadens GCA's portfolio of solutions, which has been embraced by our customer base," added Mr. Chary.
Patrick J. Ramsey, Chief Executive Officer of Multimedia Games, noted, "We are excited about the opportunity this combination provides to leverage Multimedia Games' creative and innovative game development capabilities with GCA's expansive customer base to provide best-in-class, integrated solutions to the gaming community, and deliver increased value and scale to our respective customers and employees."
Pursuant to the merger agreement, GCA will acquire all of the outstanding stock of Multimedia Games for $36.50 per share in cash, representing a 31% premium to the closing stock price as of Friday, September 5, 2014, for an aggregate purchase price of approximately $1.2 billion.
The proposed acquisition will be financed with debt and cash on hand for which GCA has secured committed debt financing.
The proposed acquisition is subject to customary closing conditions, including receipt of MGAM shareholder approval and antitrust and gaming regulatory approvals, and is currently expected to be completed in early 2015.
The merger is expected to achieve approximately $30 million of synergies as a combined entity; and, on a pro forma basis, is estimated to generate about $800 million in revenues and approximately $217 million in Adjusted EBITDA based on the last twelve months results as of June 30, 2014.
The transaction is expected to be immediately accretive to GCA stockholders as of the closing date of the acquisition.
Ram V. Chary will continue to serve as President and Chief Executive Officer of GCA.
The full-year outlook reflects the differentiated competitive advantage that our integrated solutions drive for our clients," said Ram V. Chary, President and CEO of GCA.
First Quarter 2014 Results
Revenues increased by $3.7 million, or 3%, to $150.6 million for the first quarter 2014, as compared to the same period last year.