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Howard Stutz

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IGT sells British-based slot developer

27 Apr 2011

By Howard Stutz
LAS VEGAS, Nevada -- Slot machine manufacturer International Game Technology announced Wednesday it sold its British-based Barcrest Group for between $54 million and $66 million.

The transaction with lottery equipment provider Scientific Games could close later this year.

Barcrest develops slot machines and game content for casinos in the United Kingdom and other European markets. IGT acquired the manufacturer in 1998 and grew the business over the last decade. Barcrest had once led the United Kingdom in market share.

According to a statement, the deal was for a net-cash consideration of approximately $54 million. IGT could receive an additional $3 million in cash subject to certain post-closing adjustments. In total, the enterprise value of the transaction could reach approximately $66 million.

Several gaming analysts said the United Kingdom gaming market was comprised of low-cost, low-profit slot machines, compared with the U.S. and other markets.

"We see this divestiture as another signal that (IGT) management is focused on exiting non-core businesses that consume recourses and have modest growth potential," Credit Suisse gaming analyst Joel Simkins told investors.

IGT Chief Executive Officer Patti Hart said the sale allows the company to focus on its other business lines.

"Scientific Games is an ideal new home for Barcrest and provides a strategic alignment between both companies' core objectives," Hart said.

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