Accel Entertainment (NYSE: ACEL), a distributed gaming operator, has announced a strategic partnership in Nevada with Green Valley Grocery Convenience Stores to enhance its market presence.
Based in Chicago, Accel revealed that its division, Century Gaming Technologies Nevada, has established a new route partnership with the convenience store chain to deploy around 600 gaming machines within the state. Accel specializes in distributing video gaming terminals (VGTs) in various locations authorized for machine-based gaming, excluding traditional casinos. Typical clients include bars, convenience stores, gas stations, taverns, and truck stops.
“This new agreement utilizes Accel’s operational capabilities, entertainment options, data analytics, and promotional strategies to enhance customer interaction, boost operational efficacy, and foster growth over time,” the company stated.
The financial specifics of the partnership with Green Valley were not made public.
Significance of the Partnership
Investor sentiment towards Accel is optimistic, partly due to its capacity to generate revenue beyond Illinois, which constitutes roughly 75% of the company’s total income.
This highlights the significance of ancillary agreements like the one made with Green Valley Grocery, which help diversify Accel’s geographic footprint. In December, Accel’s Century Gaming Technologies Nevada acquired the route business of Dynasty Games, enhancing its presence in Northern Nevada.
Notably, Green Valley Grocery is under the ownership of Anabi Oil — a familiar ally for Accel. In January, both companies formed an agreement that designated Accel as the gaming partner for all Rebel Convenience Store locations overseen by Anabi in Las Vegas.
By the end of Q1, Accel managed 19,607 gaming machines across 2,110 locations in Nevada, making it the company’s second-largest jurisdiction regarding the number of devices deployed.
Accel’s Ongoing Expansion Efforts
Accel is actively pursuing geographic diversification. This year alone, it has engaged in multiple agreements with Anabi Oil, and in June, it acquired a truck stop casino operator in Louisiana, a state where, as of Q1, it operated nearly 12,200 machines in around 1,400 venues.
Analysts view Accel as a potentially undervalued stock with one of the largest portfolios of slot machines in the U.S., forecasting significant growth in earnings before interest, taxes, depreciation, and amortization (EBITDA) over the long term.
“We consider ACEL an underappreciated gaming operator, showcasing a strong potential for cash flow generation, robust growth, and an appealing valuation,” stated David Bain, an analyst at Texas Capital, in a recent update. “Given its hyper-local operational model with mostly variable costs, ACEL is better positioned to withstand economic downturns compared to many regional gaming companies while anticipating sales and EBITDA growth that surpasses the industry average.”