AGS goes private in $1.5B Brightstar Capital acquisition

Gaming supplier says deal positions it well for targeted investment

AGS has agreed to be acquired by affiliates of private equity firm Brightstar Capital Partners in a deal worth approximately $1.5 billion CAD.

The transaction is projected to close in the second half of 2025. Global gaming supplier AGS will become a privately held company.

If AGS shareholders approve the takeover, which the board recommends that they do, they will receive around $17 CAD per share in cash, representing a 40% premium on AGS’ closing price on May 8, 2024.

“We are very pleased to reach this agreement, which we believe provides our stockholders with compelling, certain cash value,” said CEO & President of AGS David Lopez in a statement. “Joining forces with Brightstar represents an exciting new chapter for AGS and our mission to provide exceptional gaming solutions for our operator partners.

“With Brightstar’s resources and strategic guidance, we believe AGS will be well-positioned to make targeted investments in R&D, top talent, operations and industry-leading innovation, which should accelerate our global footprint.”

AGS supplies land-based slot and table game products as well as online casino content to operators across the gaming industry. In Canada, it has a footprint in numerous provinces, including deals with Caesars Digital in Ontario’s regulated open gaming market, as well as through partnerships with provincial lottery corporations including Loto-Québec and AGLC’s site.

Brightstar will gain full control of the supplier’s gaming operations if and when the deal is finalized.

Acquisition of AGS has been long-mooted

In light of the announcement, AGS cancelled its Q1 2024 conference call on May 9. It will not provide a quarterly earnings release.

The company’s last financial update reported a total revenue increase of 15% year-on-year in Q4 2023. The period was also the 11th consecutive quarter of double-digit growth for the company’s revenue.

The company also known as PlayAGS was acquired by international private equity company Apollo Global Management in 2013. It began listing on the New York Stock Exchange in 2018.

The company has been the subject of takeover interest from other suitors in recent years. Inspired Entertainment Inc. proposed acquiring the supplier for around $500 million CAD in 2022 before talks eventually fell through. Since then, AGS’ value has trebled.

Andrew Weinberg, Founder & CEO of its new owners Brightstar, said the acquisition represents the company “taking a long-term approach to creating value.”

“AGS has a strong pipeline of new products, and we believe the company’s innovative approach to game development provides significant potential for continued growth,” he added.

Roger Bulloch, a partner at Brightstar, noted that AGS offers, “award-winning products, differentiated culture, and outstanding reputation in this expanding industry.”

NYSE shares of the slot manufacturer surged 26.56% on the day of the announcement on volume that was 35 times the daily average.

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