Fort Worth and San Francisco-based TPG has bought an Illinois-based slot-machine operator, the companies announced Thursday.
TPG Pace Holdings Corp., TPG's special-purpose acquisition company, penned the definitive business combination agreement with Accel Entertainment, which now has an anticipated enterprise value of about $884 million.
Accel Entertainment operates more than 8,000 live slot machines in over 1,700 locations that include bars, restaurants, gaming cafes, convenience stores and truck stops.
Illinois is significantly expanding the gaming and gambling industry in the state. Gov. J.B. Pritzker looks set to sign Senate Bill 690, a new law that legalizes sports betting and increases the number of casinos allowed.
In a press release, TPG said the company expects Accel to generate more than $100 million in 2020 and more than $3 billion of revenue in the coming years.
“Accel has spent the last decade establishing itself as the gold standard in the gaming-as-a-service industry, delivering high levels of growth and profitability,” said Karl Peterson, president and CEO of TPG Pace. “This transaction is perfectly aligned with our business objectives. Not only is Accel itself a leader, but gaming-as-a-service is one of the fastest growing segments in gaming with a substantial addressable market. "
The acquisition, expected to close in late third quarter of 2019, is still subject to the scrutiny of regulators.
The transaction also seeks approval from a majority of TPG Pace shareholders. TPG Pace held an investor conference call to discuss the transaction on Thursday.
TPG will combine Accel with TPG Pace while retaining the Accel Entertainment name. The combined company will be a publicly listed company, according to TPG.
“We are extremely excited to be partnering with TPG Pace as we continue to execute on our strategic growth plan as a publicly held company,” said Andy Rubenstein, Co-Founder and CEO of Accel. “Karl [Peterson] and his team have an extensive track record of value creation, especially in situations where they have helped private companies with high growth potential achieve tremendous success in the public markets. With the TPG Pace team on board, we will be able to leverage their relevant insights, differentiated capabilities and operational expertise as we enter this next phase of growth for Accel."