IGT buying company for $45 million

Tuesday, Jan. 2, 2001 | 11:21 a.m.

International Game Technology of Reno announced a definitive agreement to acquire fellow slot machine maker Silicon Gaming Inc. in a cash deal valued at $45 million.

IGT will pay 8.25 cents to 9.5 cents per share for Silicon, a price that will be determined by the value of Silicon's assets at the time of the deal's close, as well as the amount of the company's liabilities. Several months ago, the companies disclosed they were in merger talks -- the definitive agreement was announced last month.

Silicon is the majority owner of WagerWorks Inc., a not-for-cash Internet gaming entity developed in partnership with gaming giant MGM MIRAGE. As part of its deal to be acquired by IGT, Silicon said it will sell all but 4.9 percent of its shares in WagerWorks prior to the deal's close. Such a deal could increase the consideration paid to Silicon shareholders, but Silicon did not say if it had a buyer lined up.

In addition to WagerWorks, Silicon is the designer and manufacturer of a line of video-based slot machines, including the "Family Feud"-themed slot area at the MGM Grand hotel-casino. The company maintains offices in Palo Alto, Calif., and Las Vegas.