Supplier News
US – Inspired makes US$360m play for PlayAGS
By Lewis - 15 August 2022
Inspired Entertainment has made a $370m offer to acquire slot machine maker PlayAGS. Inspired has offered $10 per share in cash to acquire PlayAGS according to Reuters. PlayAGS shares jumped at the news on Friday, closing up 25 per cent at $7.52. The as yet undisclosed deal by both parties has been widely reported in the media since Reuters broke the story over the weekend.
Inspired Entertainment noted recent speculation in the press and financial markets regarding a potential transaction with PlayAGS, Inc, but stated that as a matter of policy, Inspired does not comment on market rumours or speculation. PlayAGS confirmed in a statement that it had received a proposal. It added that it did not accept it, but remained in preliminary discussions about a potential deal. It cautioned that no transaction was certain.
AGSPlay reported its latest second quarter earnings on August 8, 2022, showing domestic EGM recurring revenue climbing to a record US$46.2m and its premium EGM installed base nearly doubling year-on-year, growing 15 per cent sequentially. However, the company was especially hit hard by the pandemic and the servicing of debt that stood at $574.3m at the end of June this year. The upshot being that AGSPlay is currently worth a fifth of its 2019 value, following its Apollo Capital-backed IPO in 2018.
In addressing the company’s second quarter financial performance, AGS President and Chief Executive Officer David Lopez said, “Our second quarter results reflect the growing returns we are realising as a result of the significant investments made into our R&D, sales and product management teams over the past 24 months. These investments have accelerated the operating momentum we are seeing within the business, as reflected by the material year-over-year growth in our reported Q2 2022 net revenues, net income and Adjusted EBITDA.”
Inspired Entertainment, on the other hand, has seen its market value grow to $400m with a 72 per cent jump in quarterly revenue to $71.3m in August, as its business rebounds faster from pandemic lockdowns. Stewart Baker, Inspired’s Executive Vice President and Chief Financial Officer, commented on the results: “We are particularly pleased with our second quarter results, given the prevailing perception of headwinds from the macro-economic environment as well as the impact from foreign exchange rates. Given our ongoing strong performance in the face of these headwinds, the long-term outlook of the company and the strength of our balance sheet, we have utilised our board-approved share buyback program to repurchase nearly 750,000 shares of Inspired common stock, as of August 9th, at an average price of $9.73 per share (before trading expenses).
“Moving forward, we see continued pressure from FX rates, however our underlying business has maintained the same trend. We will continue to be disciplined in our approach to capital deployment, while also focused on executing on our strategic plan to deliver profitable growth, increase cash flows and maximise shareholder value.”
