AGS to go private as part of $1.1bn deal

AGS, a supplier of casino products, has agreed to a $1.1bn deal which will see the New York Stock Exchange-listed company go private as part of Brightstar Capital Partners’ affiliates, the company said in a press release.

The proposed buyout price was set at $12.50 per share bringing the total to well over the one billion threshold and representing a 40% premium on the company’s trading price as of May 8, which prompted a quick action on the part of AGS’s management.

The board has voted unanimously in favor of the deal, as confirmed by AGS President and CEO David Lopez who commented on the transaction, saying that the company was very pleased with the buyout price and that stockholders have found the offer "compelling" and fair.

"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," Lopez explained.

Why would Brightstar initiate the deal? There are several reasons why this could be the case. Previously, the fund tried to acquire Inspired Entertainment, but those efforts fell flat. Brightstar CEO Andrew Weinberg has welcomed the chance to see his fund move forward with this acquisition, and hailed AGS as a company that has been known for creating value.

Interestingly, though, the deal does not seem to be an open-shut case, as Halper Sadeh LLC, a class-action law firm, has said that it is looking into whether the deal was indeed fair to AGS shareholders, as advertised by the board of directors.

Mergers and acquisitions have been a frequent occurrence in the gambling industry. Blackstone Group acquired Crown Resorts in a similar deal back in 2022, despite the legal headwinds that the casino operator was facing at the time.

Image credit: Brightstar Capital Partners