PlayAGS, Inc. recently announced it has entered into a definitive agreement to acquire all issued and outstanding common shares of Integrity Gaming Corp. for a cash payment of CAD$0.46 per share or a total transaction value of $49 million, which includes repaying $36 million of Integrity’s outstanding debt.
The transaction is expected to be funded with cash on the balance sheet and to close in the first half of 2019, subject to approval by Integrity’s shareholders, receipt of applicable regulatory, court and third-party approvals, and other customary closing conditions. In fiscal 2017, Integrity generated revenue of approximately $16 million and pre-synergy EBITDA of approximately $9 million. As a result of revenue optimization and other efficiencies, the company expects that adjusted EBITDA will grow at approximately 15 percent on an annualized and non-GAAP basis, beginning in fiscal 2019.
“The Integrity team has built a strong business, with an installed base of more than 2,700 Class III and Class II games in Oklahoma and Texas, partnering with some of the largest tribal gaming operators in the U.S.," said Andrew Burke, AGS senior vice president of slot products. "AGS’ roots are in Oklahoma, and we are excited to invest further in a market we are so passionate about and where we already have strong sales and customer support networks. We look forward to working in partnership with the Integrity team to provide Integrity’s customers with an exceptional service and support experience and a continued focus on driving optimal game performance.”
“We strongly believe this is a good transaction for our company and that our customers will benefit from AGS’ deep roots in Oklahoma and its proven ability to successfully manage a large footprint of leased games to drive strong performance for gaming operators," said Robert Miodunski, Integrity interim CEO. "We look forward to working closely with the AGS team to ensure a smooth transition and continuity of service and support for our customers. I am proud of the Integrity team and the success we have achieved over our more than 20 years.”
Integrity owns slot machines manufactured by various slot suppliers, including AGS, in approximately 30 tribal casinos in Oklahoma and Texas and also offers direct sales of other gaming products and supplies.
Paul, Weiss, Rifkind, Wharton & Garrison LLP and Blake, Cassels & Graydon LLP served as legal advisors to AGS.