Gaming twist manufacturing business Everi Holdings (NYSE:EVRI) is ramping up its mental object library, announcing today it’s purchasing certain assets from Australia-based Atlas Gaming.
Atlas is a producer and provider of proprietary gaming mental object and products. Las Vegas-based Everi is getting select evolution technology and intellect holding assets from the seller.
Financial terms of the sell transaction weren’t disclosed, but B. James Whitcomb Riley psychoanalyst Saint David Bain estimates the buyer is paying inward the “mid-single-digit million-dollar range.” The dealings is slated to shut over the next 60 days.
The acquisition of the Atlas assets complements Everi’s existing mettlesome development studios and portfolio of games while providing a footpath for future expansion into new international markets,” according to a statement issued by Everi.
The transaction gives Everi a foothold in Commonwealth of Australia — the second-largest slot market inward the mankind after Second Earl of Guilford America.
Good Timing for Everi
For any one-armed bandit simple machine manufacturer, it’s ever prudent to long pillow mental object libraries and dungeon games fresh. But inward the case of Everi buying the Atlas assets, the dealings could show peculiarly well-timed, because slot exact is forecast to quicken this year.
Bain estimates north of 15,000 one-armed bandit replacement units testament follow sold this year, creating approximately $255 million in sales and $107 1000000 in earnings before interest, taxes, wear and tear and amortization (EBITDA). Additionally, unexampled casinos opening night and locus expansions could take purchases of virtually 7,000 gaming devices this year.
Everi’s announcement of the Atlas trade arrives as cassino operators are focusing to a greater extent on the gaming storey following the coronavirus pandemic. With that, there’s renewed emphasis on higher-margin expansion slot machines. Regional gambling casino operators are expected to follow dedicated buyers of new devices this year, because it was gaming amenities that helped those venues rebound from COVID-19.
“This transaction strengthens Everi’s developing capabilities and will farther bolster up the future tense enlargement and distinction of our gaming products,” said Everi EVP James Dean Ehrlich inwards the statement.
Long-Term Win
The Atlas dealings isn’t likely to follow accretive to Everi earnings this year. But it could live a accelerator for growth as presently as 2023. Moving into Australia, which is nursing home to 200,000 one-armed bandit machines, puts Everi front-and-center inwards terms of competing with some well-known manufacturers. But the run could pay off sour over the long term.
“Major players in Commonwealth of Australia are Aristocrat (market deal leader, by far), followed by SGMS. Notably, both Aristocrat and SGMS buy in valuations are at several turns above EVRI,” said B. Riley’s Bain. “The cognitive content pattern and Commonwealth of Australia lowly could also leading to EVRI slot penetration inwards Asia, inward our view, though Australia testament potential remain EVRI’s magnetic core international elaboration sweat for some time.”
The analyst adds Everi is already gaining market place deal inwards the US, and the Atlas purchase adds diversification to the buyer’s US-only studio roster. He rates the buy in a “buy,” with a $40 price target, or almost threefold where it unsympathetic on Jan. 10.