Bally Technologies Inc. (NYSE:BYI) announced its agreement to acquire SHFL entertainment Inc (NASDAQ:SHFL) for $23.25 per share or $1.3 billion in cash on Tuesday. According to the company, the acquisition price represents a 24 percent premium on the closing price of SHFL common stock on July 15, 2013.

Bally Technologies

Under the terms of the agreement, Bally Technologies Inc. (NYSE:BYI) also acquired the $8 million debt and $41 million cash of SHFL entertainment Inc (NASDAQ:SHFL) as of April 30, 2012.

Bally Technologies Inc. (NYSE:BYI) expect that the combined company would generate synergies of at least $30 million. The acquisition allows the company to expand its presence in key international markets, and to provide accretion to diluted earnings per share and free cash flow in the first 12-months after completing the deal.

Merger A “Great Strategic Fit”

In a statement, Ramesh Srinivasan, president and chief executive officer of Bally Technologies Inc. (NYSE:BYI) emphasized that SHFL entertainment Inc (NASDAQ:SHFL) just like Bally, has an excellent customer service, a long history of proven innovation and successfully anticipated and adapted changes within the gaming industry. He said the merger of the two companies is a “great strategic fit.”

Srinivasan added, “SHFL’s intellectual property, renowned brands and industry-leading suite of diverse, high-performance products will enable us to offer an unparalleled offering of gaming products and services, which – when combined with our content, technology, operational capabilities and respective geographic footprints – will provide the most comprehensive product portfolio offered around the world.”

Right Time To Join Forces With Bally Technologies

On the other hand, Gavin Isaacs, chief executive officer of SHFL entertainment Inc (NASDAQ:SHFL) said, “”We believe that now is the right time to join forces with Bally as there is a unique opportunity to combine each other’s many strengths, particularly our talented teams who have been the key drivers of success for each organization. It also represents an opportunity for our shareholders to receive a significant premium for their shares.”

Meanwhile, Bally Technologies Inc. (NYSE:BYI) initiated an EPS guidance of $3.70 to $4.05 for fiscal 2014. According to the company, its guidance does not include the impact of its SHFL transaction or any acquisition-related costs or saving.

Bally Technologies Inc. (NYSE:BYI) is one of the leading providers of slots, video machines, casino management, interactive applications, and networked server-based systems for the gaming industry worldwide. The company was established in 1932, and its headquarters is based in Las Vegas.

SHFL entertainment Inc (NASDAQ:SHFL) was established in 1983. Its headquarters is located in Las Vegas. The company is formerly known as Shuffle Master and it engages in manufacturing automatic card shufflers, roulette chip sorters and proprietary table games and electronic gambling machines.