(Bloomberg) -- Private equity firm TPG has agreed to buy Illinois slot-machine operator Accel Entertainment in a deal that will give the gaming firm an enterprise value of about $884 million and a public listing.
TPG will combine Accel with its publicly traded acquisition vehicle TPG Pace Holdings Corp., retaining Accel’s name and management team, the companies said in a statement on Thursday. The deal is expected to close late in the third quarter of this year and is subject to approval from regulators and TPG Pace’s shareholders.
Video-game-betting technology, which Accel specializes in, is growing in Illinois after new legislation expanded the market for the machines. Their increasing popularity is eating into revenue from the state’s riverboat casinos, according to the American Gaming Association’s 2018 report.
“The proof of concept for us is in Illinois where they have become the leader with established business practices in mom-and-pop industries and found a way to differentiate themselves from the pack,” said Karl Peterson, chief executive officer of TPG Pace, in an interview. “Other states are noticing the success Illinois has by putting in slot machines, it’s become a golden-goose cash-cow in terms of raising tax revenues.”
TPG’s acquisition vehicle is publicly traded and on completion of the deal, the combined company will keep the New York Stock Exchange listing under the ticker “ACEL.”
As part of the deal, TPG Pace said it raised $45 million in a private placement of stock at $10.22 per share to buyers, including the firm’s management and some institutional investors and industry executives, the company said.
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