The Ainsworth Game Technology Limited (ASX: AGI) share price is trading lower in morning trade
At the time of writing the gaming technology company's shares are down 1% to 69.5 cents.
What did Ainsworth announce?
This morning Ainsworth revealed that it has bolstered its portfolio through the acquisition of U.S. based MTD Gaming.
According to the release, the company has agreed an initial purchase price of US$13 million, with an additional US$13 million of deferred consideration payable on the successful delivery of financial targets and contract renewals.
MTD Group is a developer and supplier of premium performing Poker, Keno, and video reel content for use in Multi-Game and Video Lottery Terminal (VLT) markets. Its products are currently installed within Montana, Louisiana, and more recently South Dakota.
Management notes that these games are highly complementary to Ainsworth's existing game suite and should provide meaningful synergies.
Ainsworth's Chief Executive Officer, Lawrence Levy, advised: "We are delighted to welcome MTD to Ainsworth. The acquisition marks another positive step in transitioning AGT to growth and improved profitability."
"MTD's unique Poker and Keno games are a great fit with our existing Class II and Class III offerings in the US and follows the global launch of our new A-Star cabinet hardware in February 2020. We expect to drive incremental revenues by offering these proven and highly successful games to customers in our established markets where Ainsworth operates, including California and Nevada," he added.
The company advised that the acquisition will be funded by its existing debt facilities and cash reserves. It is expected to be earnings accretive in the first-year post completion.
In addition to this, management revealed that all necessary closing conditions have been completed, which enables the company to push ahead with its plans immediately.
It notes that initial opportunities for these products will be within restrictive gaming and other specific gaming venues in Nevada, California, Arizona and New Mexico. These are markets that currently have a combined market size of approximately 42,000 units.
Rival Aristocrat Leisure Limited (ASX: ALL) hasn't fared as well this morning and is trading over 7% lower in early trade.
