Brightstar Capital to take PlayAGS private in $1.10bn deal

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The PlayAGS board has approved the acquisition and recommended shareholders also vote in favour of the proposed deal. Brightstar invests in industrial, manufacturing and services businesses.

Under the agreement, PlayAGS shareholders will receive $12.50 per share in cash. This represents a 41% premium to the volume-weighted average share price over the last 90 days and a 40% premium to closing price on 8 May. This is the day before the acquisition became public.

If the deal completes, PlayAGS will become a privately held company. Its shares will not list on any public markets. Subject to regulatory and shareholder approvals, the acquisition will close in the second half of 2025. 

Macquarie Capital is serving as financial advisor and Cooley LLP as legal counsel to PlayAGS. Jefferies LLC is lead financial advisor to Brightstar, with Barclays and Citizens JMP Securities financial advisors and Kirkland & Ellis LLP legal counsel.

“Compelling” value for PlayAGS shareholders

Commenting on the agreement, PlayAGS CEO David Lopez says that the acquisition marks an “exciting” chapter for the business. He adds Brightstar will support the company’s expansion in markets around the world.

“We are very pleased to reach this agreement,” Lopez said. “We believe it provides our stockholders with compelling, certain cash value. Joining forces with Brightstar represents an exciting new chapter for PlayAGS and our mission to provide exceptional gaming solutions for our operator partners. 

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

Brightstar founder and CEO Andrew Weinberg also talked up the deal. He said: “We look forward to working with David and the PlayAGS team to capitalise on opportunities by taking a long-term approach to creating value.

“PlayAGS has a strong pipeline of new products. We believe the company’s innovative approach to game development provides significant potential for continued growth.”

Brightstar partner Roger Bulloch adds: “We have been impressed by PlayAGS’ products, differentiated culture and outstanding reputation in this expanding industry.

“We trust that partnering with PlayAGS and executing on our shared vision can accelerate the company’s ability to create even greater value for its customers and players around the world.”

PlayAGS cancels Q1 announcement

Incidentally, news of the agreement broke as PlayAGS was due to announce its Q1 results.

In light of the acquisition proposal, PlayAGS will not issue a quarterly earnings release. The group also cancelled its scheduled earnings call on the quarter.

PlayAGS’s most recent results, covering the 2023 financial year, showed that the business returned to a net profit. This followed year-on-year growth across all three of its core businesses.

Group revenue climbed 15.2% to $356.5m, with double-digit percentage growth in each division: Electronic Gaming Machines, Table Products and Interactive. 

Group spending was higher year-on-year as PlayAGS expanded its operations. However, such was the impact of revenue growth, it ended 2023 in the black, reporting a $7.4m net profit, in contrast to 2022’s $6.3m loss.

In addition, adjusted EBITDA for 2023 climbed 14.7% to $159.0m, with a margin of 44.6%.

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