S&P: GTech ratings unmoved on acquisition

Standard & Poor's said the announcement by GTech Holdings Corp. (BBB/Positive/--) that it has agreed to buy Spielo Manufacturing Inc. has no effect on GTech's credit rating or outlook.

The enterprise purchase price for Spielo is about $150 million, payable in cash and funded with GTech's excess cash balances. In addition, in the 18 months following the closing, Spielo shareholders will be entitled to receive an earn-out amount of up to $35 million, based upon Spielo achieving certain video lottery terminal installation objectives in New York.

GTech maintains a good level of liquidity, highlighted by more than $300 million of cash on hand and access to a $300 million revolving credit facility, which is fully available. The company also has no significant near-term debt maturities, and it maintains a moderate financial profile.

These factors enable the company to pursue its growth strategy, which include acquisitions, without affecting its ratings, S&P said.

Meanwhile, the acquisition catapults GTech into one of the largest global providers of participation-based gaming machines. It gives GTech the ability to leverage Spielo's strengths in video lottery terminal design and game deployment, which will provide GTech with an end-to-end terminal solution. It will also equip GTech with a broader base of opportunities including terminal replacements and ongoing game royalties.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.