tourn eventAnother month, another gaming supplier merger.

Fresh off the heels of recent mergers between GTECH and International Game Technology (IGT), Scientific Games and Bally Technologies and Aristocrat Technologies and Video Gaming Technologies (VGT), Global Cash Access (GCA), a Las Vegas-based supplier of fully integrated cash access solutions and related services to the gaming industry, announced last month that it was acquiring Multimedia Games, an Austin, Texas-based developer of comprehensive systems, content and electronic gaming units for Native American and commercial casinos for $1.2 billion in cash.

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,” Ram V. Chary, president and CEO of GCA said in a prepared statement. “This acquisition further strengthens and broadens GCA’s portfolio of solutions, which has been embraced by our customer base.”

“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,” added Patrick J. Ramsey, CEO of Multimedia Games.

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 percent premium to the closing stock price prior to the sale, for an aggregate purchase price of approximately $1.2 billion, according to company press materials. 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 12 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 CEO of GCA. The combined company’s headquarters will remain in Las Vegas and its game development operations will be based in Texas.