Global Cash Access to acquire MCA Processing assets
Global Cash Access Inc. said Friday it had agreed to acquire the assets of MCA Processing LLC for an undisclosed amount.
Las Vegas-based MCA provides ATM, debit card and credit card cash access services to casinos and manufactures services-redemption kiosks.
MCA Processing President and CEO David Balmer described the merger as an opportunity.
"It was not something we were forced to do," Balmer said. "I think it will be beneficial for Global Cash and the shareholders of MCA Processing."
The deal includes contracts with Caesars Entertainment Corp. properties in Las Vegas, Atlantic City and Pennsylvania.
"We believe the MCA acquisition is complementary to our core business and will bolster our position as the leading provider of integrated cash access products and services to the gaming industry," Global Cash President and CEO Scott Betts said.
Global Cash lost its exclusive contract with Caesars in December to Global Payments and MCA Processing.
Before losing the contract, Caesars contributed roughly $80 million in revenue to Global Cash Access. The acquisition was expected by late November.
The properties included represent roughly 40 percent of the Caesars North American portfolio, Roth Capital Partners analyst Todd Eilers said.
Eilers estimated the deal would contribute about $30 million in annual revenues.
"We are a bit surprised by the acquisition as we thought Global Gaming Access would try to win the Caesars business back when the current contracts expire, which occurs in two years," Eilers said.
He said he would wait and see the terms and management's rationale for acquiring the business before making a final judgment on the deal. Eilers expected more details to be released Wednesday when Betts hosts a third-quarter earnings conference call.
Analysts polled by Yahoo Finance expect third-quarter earnings of 10 cents per share on revenue of $137.1 million.
Contact reporter Chris Sieroty at csieroty
@reviewjournal.com or 702-477-3893.
