Gambling machine maker Bally Technologies Inc. (NYSE: BYI) announced today that it has struck a definitive agreement to acquire SHFL entertainment Inc. (NASDAQ: SHFL) for $23.25 a share, or about $1.3 billion, in cash. The price represents a 24% premium to SHFL’s closing price last night. The acquisition is not expected to close until the second quarter of 2014.

SHFL, formerly known as Shuffle Master, has already obtained an online gambling license in Nevada and is one of the handful of well-established online gambling developers. Bally also had obtained an online gambling license in Nevada. Neither has a license yet in New Jersey, the only other state yet to approve online, real-money gambling.

In addition to its purchase of SHFL, Bally also provided guidance for its 2014 fiscal year, which began on July 1. The company forecast diluted earnings per share (EPS) of $3.70 to $4.05, and it does not include any impact from the acquisition of SHFL. The current consensus estimate for 2014 EPS stands at $3.85.

For the 2013 fiscal year, which ended in June, the consensus estimate calls for Bally to post EPS of $3.43 on revenues of $988.27 million. So far this year the company has posted EPS of $2.50 and the consensus fourth-quarter estimate calls for EPS of $0.93. Bally is scheduled to report earnings on August 5.

Shares of SHFL are up 21.7% at $22.75, after posting a new 52-week high of $22.84 earlier today.

Shares of Bally are up 7.5% at $65.51, after posting a new 52-week high of $66.14 earlier today. The 52-week low is $41.74.

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.