The company announced that it has agreed to acquire Avcom, a New York City based gaming studio focused on building social casino games for mobile devices under the brand Mobile Vegas. The Company expects to issue approximately 491,000 shares of MGT restricted common stock to acquire full ownership of Avcom. In addition, a contingent payment of up to an additional 330,000 shares of restricted common stock is payable if certain revenue metrics are achieved within 18-months. Avcom will operate under the name MGT Studios and oversee the Company's online and mobile gaming properties and digital marketing. Along with the gaming studio, the acquisition brings to MGT a proprietary software platform for secure gaming, mobile development, and sophisticated analytics. In addition, the company also will gain access to expertise in the areas of digital marketing and real money gaming. The Avcom team includes a former IGT lead artist who has designed popular theme based slot machines. Importantly, Avcom also brings over 650K slot machine players from its existing instant win game offerings. The CEO of MGT said that "The acquisition of Avcom, including its leadership team, places MGT in a strong position to capitalize on the popularity of the social casino industry as well as adding tremendous value to our other gaming properties. We couldn't be happier with the exceptional talent that we have added to our team.". The press release also mentions the size and the potential of the social casino industry. A Morgan Stanley research report valued the market at $1.7 billion with the potential to triple by 2015. Social casino has become one of the most profitable social gaming genres, and the success of the segment has been validated by high profile acquisitions by IGT and Caesars for hundreds of millions.
