Multimedia Games acquires PokerTek in $13 million deal

Slot machine provider Multimedia Games, Inc. said Wednesday it spent $13 million to acquire electronic table game company PokerTek, Inc.

The transaction was announced as part of Multimedia Games’ second quarter earnings, in which the manufacturer said it grew both profits and revenue in the quarter that ended March 31. Multimedia Games is headquartered in Austin, Texas, with a sales and marketing office in Las Vegas.

PokerTek places electronic poker, blackjack and baccarat tables in casinos throughout the U.S. and Macau. The deal requires regulatory approval.

In a 12-month period, PokerTek generated total revenue of $5.5 million. Approximately 85 percent came from games where the company shares gaming revenue with casinos.

Multimedia Games CEO Patrick Ramsey said electronic gaming tables have become a growing component of the casino floor for U.S. and international casinos. The transaction would also give Multimedia Games an entry into Macau, the world’s largest gaming market.

“This proposed transaction represents an excellent opportunity for Multimedia Games to expand our product portfolio,” Ramsey said in a statement.

Multimedia Games said its net income in the quarter was $11 million, or 35 cents per share. A year ago, the company’s net income was $9.3 million, or 31 cents per share.

Total revenue grew 25 percent to $58.2 million.

Ramsey credited an 88.6 percent year-over-year increase in slot machine sales, including deals with casinos in Nevada, Oklahoma and Washington.

Janney Montgomery Scott gaming analyst Brian McGill said Multimedia Games has “significant growth” opportunities in Nevada, where it has placed just under 300 slot machines. He said the company has other growth potential in Pennsylvania, Illinois, Oregon and Canada that will play out through this year and 2015.

“We think there are a limited number of titles that have been approved, which is holding back the roll out,” McGill said. “Our checks continue to be positive, and we expect the (Nevada) to provide strong growth.”