CHICAGO - Accel Entertainment, Inc. (NYSE: NYSE:ACEL), a prominent distributed gaming operator, has completed the acquisition of a majority stake in two Louisiana-based gaming entities, Toucan Gaming, LLC and LSM Gaming, LLC. The $40 million transaction grants Accel ownership of 85% of both companies, known for operating multiple licensed video poker establishments in the state.
The deal is expected to generate approximately $25 million in revenue and $6 million in Adjusted EBITDA for the year 2025. It marks Accel's further incursion into the southeastern U.S. market, adding 13 truck stop locations with 450 gaming terminals and 60 locations with three machines each, totaling 180 terminals.
Accel CEO Andy Rubenstein expressed confidence in the expansion, noting Toucan's shared values and potential for growth. Stan Guidroz, the CEO of Toucan Gaming, who retains a 15% stake, will lead the combined business under the Toucan Gaming brand in Louisiana.
Toucan is recognized as Louisiana's rapidly growing gaming provider, distinguished by its entrepreneurial approach and commitment to high-quality gaming experiences. LSM Gaming, with a longstanding presence in the northwest Louisiana tri-parish area, brings a seasoned team and a portfolio of truck stop and small location gaming operations to the table.
Accel, known for its full-service gaming solutions in non-casino locations, aims to leverage this acquisition to bolster its presence and innovation in the southeastern U.S. market.
This news is based on a press release statement and does not include any forward-looking statements or projections beyond those contained in the original press release. The press release also includes cautionary notes regarding forward-looking statements and non-GAAP financial information such as Adjusted EBITDA, which have not been reconciled due to certain unpredictable factors.
In other recent news, Accel Entertainment reported a steady increase in its third-quarter results for 2024, with a revenue of $302 million and an adjusted EBITDA of $46 million. This represents a year-over-year growth of 5.1% and 3.9% respectively. The gaming company's growth has been attributed to strategic moves in Illinois, its largest market, and expansion into new markets including Nebraska, along with the upcoming acquisition of Fairmont Park.
Accel's Q3 2024 revenue and adjusted EBITDA have increased by 5.1% and 3.9% year-over-year, respectively, demonstrating a solid performance in the face of a dynamic gaming industry landscape. Despite facing a 1% tax hike in Illinois, the company is making strides in its market, with a 5% increase in market-wide Gross Gaming Revenue (GGR) and the advancement of the Fairmont Park acquisition, which includes a sports betting license and plans for a casino.
The company also reported significant growth in Nebraska and is actively repurchasing shares under a $200 million program. As part of its future plans, Accel is focusing on organic growth in Illinois, Nebraska, and Georgia, and exploring M&A opportunities in the $15 billion local gaming market.
These recent developments underline Accel Entertainment's commitment to growth and shareholder returns, with management remaining optimistic about organic growth and M&A opportunities in the local gaming market. Investors will be closely monitoring the company's progress in realizing its strategic goals and capitalizing on the opportunities within the gaming sector.
InvestingPro Insights
Accel Entertainment's recent acquisition in Louisiana aligns with its growth strategy, as reflected in the company's financial metrics. According to InvestingPro data, Accel's revenue for the last twelve months as of Q3 2023 stood at $1.21 billion, with a revenue growth of 5.13%. This acquisition is poised to contribute an additional $25 million in revenue, potentially accelerating the company's growth trajectory.
The deal's expected contribution of $6 million in Adjusted EBITDA for 2025 is significant when considering Accel's current EBITDA of $176.6 million. This acquisition could boost the company's EBITDA growth, which was 5.54% in the last reported period.
An InvestingPro Tip indicates that Accel "operates with a moderate level of debt," suggesting that the company may have the financial flexibility to pursue such strategic acquisitions without overstretching its balance sheet. Additionally, another InvestingPro Tip notes that the company's "liquid assets exceed short term obligations," which could provide further reassurance about Accel's ability to integrate and finance this expansion.
For investors seeking a more comprehensive analysis, InvestingPro offers 5 additional tips that could provide deeper insights into Accel Entertainment's financial health and market position. These additional tips, available with an InvestingPro subscription, could be valuable for understanding the full impact of this acquisition on Accel's future performance.
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