Bally Technologies Will Spend $1.3 Billion to Buy SHFL Entertainment
Word came today that two stalwart companies of the gaming industry – Bally Technologies and SHFL Entertainment – will join forces as Bally plans to buy out SHFL Entertainment for the price of $1.3 billion. SHFL Entertainment was formerly known as Shuffle Master, having changed its name last year in order to convey the variety of products it has on offer.
The total sale figure represents a $23.25 per-share price, which means that Bally is willing to pay 24 percent more than SHFL’s stock was trading for on Monday, according to widely published news reports. Both companies are headquartered in the state of Nevada.
Both companies stand to benefit in international markets
Bally is using the deal as a means of spurring its international business, particularly in the regions of Australia and Asia. Both locations enjoy a thriving gambling market, however Bally has made little headway in these areas. In partnering up with SHFL Entertainment, Bally expects to expand its business into both the Asian and the Australian markets.
“This strategic combination will immediately create one of the world’s largest end-to-end gaming technology innovators,” remarked Ramesh Srinivasan, who serves as CEO of Bally Entertainment.
Shuffle Master has interesting history
Shuffle Master has one of the more interesting company histories in the gambling industry, an industry that is indeed chock full of fascinating histories. The company’s original name is reflective of its signature product, a mechanical card shuffler that was invented by Shuffle Master’s founder, a truck driver named John Breeding, way back in 1983 in the state of Minnesota. Breeding had heard of the problems faced by casinos due to card counting, and developed the Shuffle Master device as a way for the casino to fight back against card counters.
Later, the company developed games that would utilize the automated deck shuffler in order to promote the sale of the machine, with the perhaps best-known being Let It Ride, a variation of five card stud poker. SHFL has since branched out into producing slot machines and table games, products that form much of the appeal for Bally, as SHFL Entertainment’s games have a strong footing in such markets that Bally has not yet been able to penetrate.
Both companies are pleased with the deal, as are analysts
The chief executive officers of both companies expressed excitement about the deal, with the head of SHFL Entertainment, Gavin Isaacs, remarking in a statement, “Like SHFL, Bally focuses on creating both entertaining player experiences through high-performing content and state-of-the-art technological solutions to increase productivity on the casino floor.”
Those in the financial world also celebrated news of the deal, with Sterne Agee & Leach analyst David Bain writing, “From a strategic standpoint, we like the combination of mostly non-competitive business lines that include unique technologies and patents from both companies.”
Bain has recommended the purchasing of Bally stock, which he expects to rise about 30 or 40 cents as a result of the deal with SHFL.
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