Before the opening of the stock market on February 16, Everi Holdings announced that its board has voted to replace Ram Chary as the company’s president and CEO.
Chary was CEO of cash-access and payment company Global Cash Access when it acquired the former Multimedia Games, and was responsible for merging Multimedia’s slot manufacturing business with the former GCA to form Everi. A longtime executive in payment and financial technology at Fidelity National Information Services prior to GCA, Chary left the operations of each former company intact under the new Everi brand, while marketing slots along with ATMs, kiosks and financial services under the new Everi brand.
Everi gave no reason for Chary’s ouster, other than a statement from board Chairman E. Miles Kilburn saying, “While this was a difficult decision, the board believes this move is in the company’s best interest.”
The company has named Michael D. Rumbolz, a member of its board of directors since 2010, as interim president and CEO during an executive search for Chary’s replacement.
Rumbolz is a veteran gaming executive who previously was CEO of Cash Systems, Inc., an Everi competitor the company acquired in 2008. He also was chairman of groundbreaking system company Casino Data Systems (now part of Aristocrat), CEO of slot manufacturer Anchor Gaming (now part of IGT), and chairman of the Nevada Gaming Control Board.
According to the company’s announcement, the board will consider internal and external candidates in its search for a permanent CEO.
“Our search committee is working diligently to identify a qualified successor for the role of permanent CEO, and during the interim I will work directly with our talented executive team to ensure there are no disruptions to our daily business operations,” Rumbolz said in the company statement. “I will continue to execute the existing corporate strategy in our games and payments businesses for the gaming industry, and given the strength of our offerings and the market opportunities available to us, I feel confident about our long-term potential to drive growth and shareholder value.”
Initial reaction to the move in financial markets was cautiously optimistic. “While the announcement could result in an initial positive reaction in the shares from the market given the recent weakness,” wrote David Katz of Telsey Advisory Group in an investor note, “we believe a measured approach to the shares pending further insight is necessary before becoming more fundamentally constructive.
“We believe the focus of the interim management team will be to review the progress of the current strategy rather than to redirect it. More specifically, the progress of increasing distribution on the gaming side through broadening the licensed gaming offerings. As well, accelerating the product development process and maintaining current standing with casino customers is likely a key focus.”
Everi reaffirmed its expectation that 2015 adjusted EBITDA will be within the previously provided range of $200 million, although Katz wrote that TAG’s estimates for Everi are now under review.