Last week, PlayAGS announced it had signed an agreement to be acquired by affiliates of the private equity firm Brightstar. The deal will be worth $1.1bn (£877.3m/€1.02bn) if completed.
PlayAGS shareholders will receive $12.50 a share in cash. This is a 40% premium to the closing price on 8 May, the day prior to the acquisition becoming public.
If the deal is concluded, PlayAGS will become a private company, and its shares will no longer be listed on any public markets. The deal is subject to both regulatory and shareholder approvals. If the acquisition achieves those, the deal will complete in the second half of 2025.
PlayAGS’ board approved the acquisition. The board also recommended to shareholders that they vote in favour of the deal. However, Emmett Investment has announced its intention to vote against what it labels an “inadequate” deal.
Emmett Investment founder and chief executive Alexander Rohr stated: “We do not oppose a take-private offer per se, but Brightstar’s offer fails to reward stockholders for the strong performance AGS has already demonstrated and fails to account for the company’s significant potential.”
Emmett Investment: Brightstar deal undervalues PlayAGS
PlayAGS announced its agreement with Brightstar a few hours before it was due to hold an earnings call to discuss its Q1 results, which it subsequently cancelled.
PlayAGS reported a total adjusted EBITDA of $44m for Q1, up 20.5% from the $36.5m generated in the same quarter last year.
Emmett Investment stated that adjusted EBITDA growth was far outpacing the industry, reiterating its positive outlook for PlayAGS’ future.
PlayAGS also posted $4.3m in net income, a sizeable improvement on the $334,000 loss the company reported in Q1 2023.