Scientific Games will soon be bolstering its product range with the acquisition of DEQ Systems, a Canadian casino solutions supplier specialising in table games and utility products.
[dropcap]U[/dropcap]nder the terms of the deal, Scientific will acquire 100 percent of the shares in DEQ Systems for a cash sum of $0.38 per share, or CA$27.2m in total. For the 12 months ended 31 May 2016, DEQ generated revenues of CAD$9.5m and saw gross profits of CAD$8.1m.
Scientific said the acquisition would particularly strengthen its table games portfolio with a series of high-value intellectual property licences and headline brands like DEQ’s EZ Baccarat, which already enjoy a strong reputation in the industry.
“The DEQ team has grown a fantastic business focused on providing revenue-generating and entertaining solutions for casino operators around the world,” commented Roger Snow, Scientific Games’ senior VP for table and utility products.
“Their established and high-performing library of table games, table progressives, and random bonusing systems will enhance our offerings, add to our recurring revenue base, and provide even more ways for casinos to engage players through Scientific Games’ extensive end-to-end casino portfolio of gaming machines, casino systems, table products, and interactive solutions.”
We look forward to working closely with the Scientific Games team to ensure a smooth transition and continued innovation for gaming operators and their players around the world
In a statement to investors, Scientific added that the transaction was expected to boost operating cash flow and earnings for the company in 2017.
The transaction is expected to close in the fourth quarter of 2016 or the first quarter of 2017, subject to approval by DEQ’s shareholders and regulatory approval in several jurisdictions. DEQ’s board of directors has unanimously approved the move.
Prior to the announcement on 30 August, shares in DEQ had been trading at CA$0.18 apiece. On the morning of Friday 2 September, shares in Scientific Games had risen by $0.28 – or 3.39 percent – to $8.53.
Joseph Bertolone, DEQ Systems’ president and chief executive, added: “We believe that this is a very good transaction for our company.
“We look forward to working closely with the Scientific Games team to ensure a smooth transition and continued innovation for gaming operators and their players around the world. I am incredibly proud of the entire team at DEQ for all that we have achieved.”