Accel Boosts Gaming Portfolio & Expands in Illinois With FanDuel

Accel Entertainment, Inc. ACEL has announced the completion of the acquisition of Fairmount Holdings, Inc., the owner of FanDuel Sportsbook & Horse Racing, which was announced on July 15, 2024.ACEL stock lost 3% in the after-hours trading session on Monday, post the acquisition closure news break.Highlights of Accel’s New BuyoutAccel closed the buyout deal for a total consideration of about 3.45 million shares of its Class A-1 common stock. This strategic move expands the company’s gaming footprint in the Illinois market, with the only active horse racing venue in the greater St. Louis metropolitan area being in its possession. The acquisition also offers it the opportunity to develop a legislatively authorized casino project and a master sports betting license used in a revenue share agreement with FanDuel.ACEL aims to invest between $85 million and $95 million for the casino construction and modest track investments in two phases, Phase I and then Phase II. It believes that the buyout will add to its business growth and profitability in the upcoming years, with a five-year forecast indicating adjusted EBITDA to be in the range of $20-$25 million and more than 75% free cash flow conversion.To sum up, Accel is optimistic about acquiring Fairmount Holdings, believing this new addition with its long-standing gaming expertise will complement its business growth in the upcoming period. Also, the new deal will enhance its service offerings in the gaming market, hence expanding its customer base.ACEL’s Inorganic Moves Bode WellAccel indulges in inorganic investments to foster its gaming market footprint and diversify its portfolio to expand its customer base. Since the beginning of 2024, the company announced six acquisitions, which aided it in building a strong gaming portfolio and expanding its locations during the year.On Sept. 19, 2024, the company acquired 24th Street Station and Lucky 7s for $0.8 million each. On June 26, ACEL completed the acquisition of Jorgenson’s Lounge for a total purchase price of $1.1 million, and on May 1, it acquired certain assets of Illinois Gaming Entertainment LLC, including 16 operational locations and gaming equipment, for a consideration of $13.5 million.The company is currently holding onto the closure of the Louisiana-based distributed gaming operator having a total value of $18.1 million. The acquisition is expected to be complete by the fourth quarter of 2024.Image Source: Zacks Investment ResearchACEL’s shares have gained 16.4% in the past year compared with the Zacks Gaming industry’s 30.5% growth. The decline in its performance, compared to the industry, is likely to have been due to the increasing costs and expenses hurting the bottom line. However, investments in accretive buyouts and focus on operational excellence are likely to aid the company moving forward.ACEL’s Zacks Rank & Other Key PicksAccel currently carries a Zacks Rank #2 (Buy).Here are some other top-ranked stocks from the Consumer Discretionary sector.Choice Hotels International, Inc. CHH currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.CHH has a trailing four-quarter earnings surprise of 8.3%, on average. The stock has gained 31.7% in the past year. The Zacks Consensus Estimate for CHH’s 2025 sales and earnings per share (EPS) indicates growth of 3.1% and 4.7%, respectively, from the year-ago levels.Interface, Inc. TILE presently sports a Zacks Rank of 1. TILE has a trailing four-quarter earnings surprise of 73.3%, on average. The stock has surged 141.5% in the past year.The Zacks Consensus Estimate for TILE’s 2025 sales and EPS indicates an increase of 3% and 13.1%, respectively, from the year-ago levels.Flexsteel Industries, Inc. FLXS currently sports a Zacks Rank of 1. FLXS has a trailing four-quarter negative earnings surprise of 12.7%, on average. The stock has soared 224.5% in the past year.The Zacks Consensus Estimate for FLXS’ fiscal 2025 sales and EPS indicates an increase of 4.9% and 54%, respectively, from the year-ago levels.Only $1 to See All Zacks' Buys and SellsWe're not kidding.Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent.Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services like Surprise Trader, Stocks Under $10, Technology Innovators,and more, that closed 228 positions with double- and triple-digit gains in 2023 alone.See Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Choice Hotels International, Inc. (CHH): Free Stock Analysis Report Flexsteel Industries, Inc. (FLXS): Free Stock Analysis Report Interface, Inc. (TILE): Free Stock Analysis Report Accel Entertainment, Inc. (ACEL): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks