Shuffle Master purchases Ongame Network
6 March 2012
By Howard Stutz
LAS VEGAS, Nevada -- Shuffle Master Gaming announced Monday it agreed to acquire Ongame Network Ltd., a European-based provider of online poker products, for almost $28.5 million.
The Las Vegas-based table game and gambling equipment vendor said the transaction will allow the company to expand its online product offerings in regulated online gaming markets. In a statement, Shuffle Master said it would operate as a provider to Internet gaming companies.
Ongame Network is a subsidiary of bwin.party Services of Austria and is one of the world's largest poker providers to online gaming operators. Ongame's global network includes more than 25 brands and operators, as well as regional networks in France and Italy.
"Poker is a natural fit for our table-centric online offerings and our many jurisdictional licenses present a compelling opportunity for our current and future online customers," Shuffle Master Chief Executive Officer Gavin Isaacs said in a statement. "Our acquisition of Ongame will allow Shuffle Master to offer a scalable, proven and secure solution for online poker."
Shuffle Master becomes the latest gaming equipment provider to enter the online gaming market through an acquisition, following slot machine makers International Game Technology and Bally Technologies.
Those moves have been viewed as preparation for future federal legalization of online poker.
Shuffle Master moved its first-quarter earnings release up a day to coincide with the transaction. The company Master expects to fund the transaction with cash on hand or availability on its existing senior secured revolving credit agreement.
The company said net income increased 58.3 percent to $7.6 million, or 14 cents a share, in the quarter ended Jan. 31, from $4.8 million, or 9 cents a share, a year earlier.
Revenue rose 28 percent to $56.1 million.
Analysts polled by Thomson Reuters had expected earnings of 11 cents on revenue of $51.1 million.
Shuffle Master leases table game titles such as Three Card Poker, Ultimate Texas Hold'em and Let It Ride, and casino management equipment, such automated card shufflers and chip counters. The company also leases dealerless electronic table games.
Shuffle Master Chief Financial Officer Lin Fox said the company paid down debt in the quarter through cash flow.
"This has facilitated our commitment to invest in the business, as demonstrated ... with today's announcement of our intent to purchase Ongame Network," Fox said.