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Best of Howard Stutz

Gaming Guru

Howard Stutz
 

IGT pays $76 million to acquire Cyberview

5 June 2008

RENO, Nevada -- Reno-based slot machine giant International Game Technology picked up another piece in the server-based gaming puzzle Wednesday, acquiring European rival Cyberview Technology for $76 million.

The deal comes nearly three months after IGT said it was in negotiations to acquire the London-based company that distributes slot machines throughout Europe and operates a well-established fixed-odds betting terminal business in the United Kingdom.

Cyberview has offices in Las Vegas but isn't licensed in Nevada. Cyberview had reportedly applied for gaming licenses in Nevada and New Jersey.

The deal, in which IGT will purchase the business assets of Cyberview, will also include a $9 million one-time license fee that will give IGT access to Cyberview's patents and technology. Cyberview has been involved in the early stages of server-based gaming in Europe. Cyberview's American operations will become part of IGT's U.S. business while its European interests will be integrated into IGT's current operations in the United Kingdom.

The buyout is expected to close by the fall.

"IGT will be able to use these assets to expand and diversify its business opportunities," Cyberview CEO Seamus McGill said in a statement.

JPMorgan gaming analyst Joe Greff said Cyberview was an experienced sever-based gaming technology provider and will be an asset to IGT.

"We find the deal to be a positive for IGT as we believe it adds yet another layer of server-based technology expertise," Greff said in a note to investors.

Most analysts have considered IGT to be in the forefront of providing server-based gaming technology to the casino industry, possibly by 2009.

Server-based gaming is considered the next wave of slot machine technology. Conceivably, server-based gaming would allow casinos to change their games and payouts with slot machines from different companies linked by a central server.

In April, IGT announced an agreement to provide a server-based gaming system to Aria, MGM Mirage's 4,000-room hotel-casino that serves as the centerpiece of the $9.2 billion CityCenter development. Aria is expected to open in December 2009.

IGT COO Steve Morro said the Cyberview deal gives the company a potential new revenue stream while adding to server-based gaming development.

Shares of IGT, traded on the New York Stock Exchange, closed at $35.08, up 34 cents or 0.98 percent.