Aristocrat Leisure has made another strategic acquisition in the US, buying Paltronics, a leading provider of game systems whose jackpot technologies are deployed in Aristocrat’s popular Hyperlink and Xtreme Mystery progressives.
The deal further shores up a growing US business for the Australian slots and systems giant (ASX: ALL) in the wake of its purchase of Video Gaming Technologies, a major supplier in the Class II tribal markets. Aristocrat is spending US$1.3 billion to acquire Tennessee-based VGT, which has about 20,000 machines in more than 145 locations in the United States and Mexico, most of them leased games distributed under revenue-sharing agreements.
No sale price was reported for Paltronics—“a compelling acquisition that will deliver significant value across key strategic segments, particularly our leading U.S. casino systems business and in the fast-growing linked progressive and jackpot markets,” said CEO Jamie Odell.
The huge but struggling US slots market is in the throes of a wave of consolidation following on Bally Technologies’ purchase of SHFL entertainment and Scientific Games’ purchase of WMS Industries. New and replacement sales have been sagging nationwide, the consequence of jurisdictional saturation, flat same-store casino revenue growth post-recession and the aging of the traditional slots customer base.
International Game Technology, the dominant US manufacturer, recently announced it was entertaining suitors and is reported to be in talks with lottery giant GTECH, private equity’s Carlyle Group and Apollo Global Management, which co-owns Caesars Entertainment, and an investment firm headed by SciGames Chairman Ron Perelman.
Paltronics provides a range of applications for in-game media windows and bonusing and jackpots for EGMs, video poker machines and table games and is seen as a fresh source of ideas for strengthening Aristocrat’s OASIS 360 casino management system. Aristocrat said the purchase will “secure access to key technology … while protecting existing multi-site progressive technology infrastructure and opening up further innovation opportunities in the jackpot segment.”
The purchase covers all material assets of Paltronics, including IP, Aristocrat said.
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