International Game Technology: Possible mergers

International Game Technology is a company that designs, manufactures and markets gaming machines and software. Its main challenge is lack of product diversity which would promote a higher sales volume. The higher percentage of its sales is made to casinos. The company should therefore merge with another company that offers its products to Casinos primarily. A good example of such companies is Gaming Partners International Corporation.

Gaming Partners International Corporation is a gaming company that specializes in the manufacture of physical games products. Its major products are playing cards, casino currency, dice, and casino furniture. A merger between Gaming partners International Corporation and International Game Technology would be beneficial to both companies in a big way.

First, the two companies would offer an advertising platform for each other. A platform in this case would come through association. The two companies would merge their marketing structures hence maximizing their marketing department. Consumers already using certain products would be willing to try other products offered by the merger. This way, the company would increase its sales and profits. While International game Technology offers technological games, the Gaming partners International Corporation offers other non-technological games. The merger would therefore help the two companies to be better placed in the market. Other companies that compete with Gaming partners International Corporation are mostly specialized companies like the US Playing Card Companies which competes in the playing cards category alone. The Gaming partners International Corporation therefore would be more beneficial for the merger (“Gaming Partners International Corp.: NASDAQ”, 2014).

A merger in this case would of course require money. There are various ways a company can raise money for expansion. First, it may use the revenue generated to buy off another company.  Gaming partners International Corporation shareholders would on the other hand be convinced to either sell off their shares to International Game Technology or stay and benefit from the growth that would be experienced by the merger. A merger results in the dissolution of the two original companies and the formation of a new company.

Other costs that would arise from the merger are the costs of rebranding. The new company name would have to be printed on the products as well as, probably, harmonizing product symbols for the two companies. The merging companies should also be able to cover them using company revenues.

The second company that would lead to a profitable merger is The Casino Company. The Casino Company is a service company that offers equipment rentals for casinos during events. They provide the service at a fee and then recover them after the event. They also provide game control services during these events. The merger would help to advertise company equipment to the various audiences who would be reached by the services of the company approached (“The Casino Company – The Best in Gaming Services!”, n.d.).

A third option of a merger would be between International Game Technology and Bally Technologies. This is a company that outsources products from other companies and provides them to their rightful users. The merger would provide International Game Technology with a ready market for all its market especially based on the trust that this company commands. The company sells worldwide and would therefore enable the company to spread its wings even further (“Bally Technologies”, n.d.).

In conclusion, while looking for a merger for International Game Technology, profitability and relevance should be prioritized. The merger should be able to add value to the products already available in the company profile. It should also help to increase the overall profitability of the company.

References

Bally Technologies. (n.d.). Retrieved July 15, 2014, from http://www.shufflemaster.com/

The Casino Company – The Best in Gaming Services! (n.d.). Retrieved July 15, 2014, from http://www.the-casinocompany.com/casinocompany.shtml

Gaming Partners International Corp.: NASDAQ. (2014). Retrieved July 15, 2014, from https://www.google.com/finance?cid=657994