Global Cash Access Holdings Inc (GCA.N), which provides cash services to casinos, said it would buy slot machine maker Multimedia Games Holding Co Inc (MGAM.O) for about $1.2 billion to strengthen its gaming business.

The offer price of $36.50 per share represents a premium of 31 percent to Multimedia's Friday closing. Multimedia Games' stock was trading at $36 before the bell on Monday.

"The acquisition of Multimedia Games ... uniquely positions GCA as an important strategic partner to gaming operators," Global Cash Chief Executive Ram Chary wrote in the statement.

The deal will help Global Cash increase its gaming offerings to existing casino customers. Multimedia Games, based in Austin, Texas, makes slot machines and slot games such as "Patriot" and "Double Dash Money".

Las Vegas-based Global Cash provides services such as cash advance, ATM cash withdrawals, and check services to companies in the gaming industry in addition to selling slot machines and jackpot kiosks.

M&A activity in the casino and gaming industry has spiked in the last few months.

In August, Australian gaming mogul James Packer took another crack at the lucrative U.S. casino market, with his Crown Resorts Ltd (CWN.AX) buying a vacant site on the famous Las Vegas Strip.

In the same month, U.S. slot machine maker Scientific Games Corp (SGMS.O) said it would buy larger rival Bally Technologies Inc (BYI.N) in a $3.27 billion deal.

Also, in July Italy's GTECH (GTCH.MI) had said it would buy U.S. slot machine maker International Game Technology (IGT.N) for $6.4 billion.

The deal, expected to close in early 2015, will help GCA save about $30 million in costs and is estimated to generate about $800 million in revenues on a pro-forma basis.

Global Cash said it would finance the deal with cash on hand and debt, for which it has secured committed debt financing.

Multimedia Games' stock closed at $27.78 on the Nasdaq on Friday, while GCA's shares closed at $7.52 on the New York Stock Exchange.