Wednesday, Aug. 5, 2009 | 12:46 p.m.
Gaming industry supplier Global Cash Access Holdings Inc. of Las Vegas announced a deal Tuesday to acquire Western Money Systems, a company based in Sparks, for $15 million.
Global Cash said Western Money Systems (WMS) is a leading developer, manufacturer and distributor of cash-handling products to the gaming industry and is one of the preeminent manufacturers and distributors of redemption kiosks to gaming customers. Closing of the deal is subject to regulatory approvals and other customary conditions.
Global Cash, which operates ATM machines at casinos and other locations and provides credit services to casinos, also reported a higher second quarter profit.
The company said it earned $9.755 million, or 12 cents per share, up from $8.721 million or 11 cents in the 2008 second quarter. Revenue grew from $166.8 million to $173 million.
Global Cash made news in the quarter when Arizona regulators recommended it be banned from serving Indian casinos in that state because of past regulatory issues. Global Cash is contesting that recommendation.
On Tuesday, Global Cash said the recession that is affecting U.S. casinos is also hurting its business.
``The company has observed continued weakness in the markets it serves and believes that weakness will be more prolonged than previously anticipated. The company now believes that revenue will be at or slightly below the low end of its previously issued expectations for 2009 of between $700 and $730 million,'' Global Cash said in a statement.
The company's stock traded Wednesday at $8.90, down 15 cents.
As for the second quarter results, they included the operations of Certegy Gaming Services Inc., which was acquired in April 2008; and Cash Systems Inc., which was acquired in August 2008.
"We continue to be pleased with the company’s performance and the resiliency of our business model given the continued headwinds faced by the gaming industry. Our strong cash flow has allowed us to continue to allocate capital to creating long-term value for our shareholders via repurchasing shares, acquiring other companies, and developing value added technology solutions for our customers. We are particularly excited to announce the acquisition of WMS," Scott Betts, chief executive, said in a statement. "We believe that WMS will allow us to align the company vertically to provide a full suite of next-generation products and services to our customers on a flexible and dynamic platform that we believe will not only be market leading but will not be replicable."
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