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Shuffle Master Shuffles Its Chips

By Jeff Hwang - Updated Nov 14, 2016 at 11:44PM

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Shuffle Master acquires table games assets of Progressive Gaming.

On Thursday, Motley Fool Stock Advisor selection Shuffle Master (NASDAQ:SHFL) announced that it has entered into a letter of intent to acquire the table games assets of Progressive Gaming (NASDAQ:PGIC), which include the Caribbean Stud and Texas Hold'Em Bonus Poker games. The acquisition cements Shuffle Master's standing as the dominant table games player in the business, adding to its leading lineup of proprietary titles, which include Three Card Poker, Let It Ride, and Ultimate Texas Hold'Em. The companies also said they expect to negotiate a licensing agreement where Shuffle Master will use Progressive's progressive jackpot system on certain table games.

Shuffle Master's stock is hovering around three-year lows. This is largely because of the company's indigestion related to the acquisition of Australia's Stargames, which brought the Rapid and Vegas Star electronic table games lineup, as well as a slot business. Despite the less-than-thrilling results over the past couple of years, Shuffle Master is still the dominant player in the table games business. That dominance includes its control of the growing market for automatic shufflers, table games, and electronic table games, including the wildly successful Rapid Roulette.

Though the companies haven't yet announced the terms of the deal, investors can at least take heart in the fact that this acquisition will almost certainly go down far easier than the Stargames play.

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Fool contributor Jeff Hwang owns shares of Shuffle Master. The Fool's disclosure policy deals from a six-deck shoe.

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