Ainsworth Buys MTD Gaming for $26 Million

Wednesday, March 11th, 2020 | Written by James Guill
Ainsworth Buys MTD Gaming for $26 Million

Ainsworth Game Technology Ltd announced earlier this week that they have purchased MTD Gaming Inc. The deal is reportedly worth up to $26 million and will see Ainsworth take over the entirety of MTG Gaming’s assets.

Ainsworth Purchases MTD Gaming Inc

On Monday, Ainsworth Game Technology announced the purchase of MTD Gaming Inc. Financial details of the purchase were not included in the press release, but according to reports, Ainsworth paid $13 million upfront for the company. An additional $13 million is due to be paid depending on the success of MTD meeting financial targets and contract renewals.

Ainsworth Games

According to a separate release from the company, the deal will be funded by cash reserves and existing debt facilities. It is also expected that the deal will be “earnings accretive in the first-year post completion.”

According to CEO Lawrence Levy, “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.

What Does MTD Gaming Inc Provide?

According to various press releases, MTD is both a developer and supplier of unique Keno, Poker and video reel games. They offer games in both Multi-Game and Video Lottery Terminal (VLT) markets. MTD currently has games in establishments in Louisiana, South Dakota, and Montana. Ainsworth said that the games are “highly complementary to AGT’s existing gaming suite.

MTG Gaming Games

According to reports, Ainsworth is looking to expand the reach of MTD. They are looking to offer MTD games in Nevada, Arizona, California, and New Mexico in the near future. Also, Ainsworth will display MTD products in the upcoming National Indian Gaming Association Tradeshow & Convention running at the San Diego Convention Center from March 25-27.

MTD President Dan Tessmer commented on the deal, stating, “We are excited to join the Ainsworth team and feel the synergies of this acquisition will be of great value to both MTD and Ainsworth customers.”

Will This Help Ainsworth Improve Profitability?

As mentioned earlier, the company is planning to pull from existing credit lines along with cash reserves to complete the purchase. The company is hoping that this deal will help it improve on some disastrous earnings from 2019.

According to financial reports, the company suffered a loss of $2.64 million due to weaker sales in several areas. In North America alone, the company saw a 6% drop in sales. The Latin American market saw a drop of 8%. The company saw increase sales in Australia but still saw overall revenue drop.

Several factors are contributing to declining revenues. In Australia, companies are drawing back on the number of online slot games (aka pokies). Also, reports are indicating that Aussies are gambling less.

For the United States, the slow expansion of casino gambling in the country is hindering growth. However, another factor may cause an unforeseen impact on profits in 2020. The COVID-19 virus is causing a lot of people to avoid travel and even shutting down casinos in some parts of the world.

Now that the virus is beginning to spread throughout the United States, casinos may be forced to make some tough decisions. Even if casinos stay open, it is likely that many people will stay away from the casino to avoid potential exposure. As such, there may be a bit of a delay before this deal proves as profitable as Ainsworth hopes.