Brightstar Capital Partners Acquires AGS in $1.1 Billion Deal

PlayAGS Incorporated, listed on the New York Stock Exchange under the “AGS” ticker, a prominent gaming supplier known for its high-performing slot, table, and interactive products, has announced the signing of a definitive agreement for its acquisition by affiliates of Brightstar Capital Partners, a middle market private equity firm specializing in investments across industrial, manufacturing, and services sectors.

The agreement, unanimously approved by AGS’s Board of Directors, recommends that the Company’s stockholders also approve the transaction, which values AGS at approximately $1.1 billion. Shareholders are set to receive $12.50 per share in cash, reflecting a substantial 41% premium over the Company’s volume-weighted average share price over the last 90 days and a 40% premium to AGS’ closing price on May 8, 2024.

AGS, recognized globally for its diverse gaming experiences catering to various player demographics, sees this acquisition as a strategic move towards further enhancing its offerings for casino partners. David Lopez, CEO & President of AGS, expressed enthusiasm about the agreement, stating: “We are very pleased to reach this agreement, which we believe provides our stockholders with compelling, certain cash value.” Lopez further elaborated on the potential benefits of joining forces with Brightstar, highlighting opportunities for targeted investments in research and development, talent acquisition, operations, and innovation, which are expected to bolster AGS’s global presence.

Andrew Weinberg, Founder & CEO of Brightstar, echoed this sentiment, emphasizing the Company’s commitment to long-term value creation, according to a company press release. “We look forward to working with David and the AGS team to capitalize on opportunities,” Weinberg remarked, citing AGS’s strong product pipeline and innovative approach to game development as key drivers for future growth.

Financial advisory services for AGS are being provided by Macquarie Capital, with legal counsel from Cooley LLP, while Jefferies LLC leads the financial advisory for Brightstar, supported by Barclays and Citizens JMP Securities. Legal counsel for Brightstar is provided by Kirkland & Ellis LLP.

No Earnings Release for the First Quarter of 2024

In light of the impending transaction, AGS has canceled its previously scheduled conference call to discuss its first quarter 2024 financial results. Furthermore, the Company will not issue a quarterly earnings release at this time but will file its 10-Q for the first quarter of the year with the Securities and Exchange Commission (SEC).

The last quarterly financial statement was released by AGS for the fourth quarter of 2024 and the numbers were quite positive, showing a total revenue increase of 15 percent year-on-year. Moreover, that was the eleventh consecutive quarter of double-digit growth for the company’s revenue.

Established in 2005 and based in Las Vegas, PlayAGS is a globally renowned entity dedicated to crafting a versatile array of captivating gaming encounters tailored to every player archetype. In 2013, it was acquired by Apollo Global Management, a powerful international private equity company, and in 2018, it got its shares listed on the New York Stock Exchange.

In 2022 there was another proposed acquisition of PlayAGS by another industry giant, Inspired Entertainment Incorporated. The purchase was supposed to happen for a much lower sum, just 370 million dollars, but the talks eventually fell through and that led to a momentary 10% dip in the share price of AGS.

The proposed acquisition, anticipated to conclude in the second half of 2025, remains subject to customary closing conditions, including regulatory approvals and the consent of a majority of AGS stockholders. Upon finalization, AGS will transition into a privately held entity, with its common stock no longer listed on any public market.