AGS has entered into a definitive agreement to acquire all issued and outstanding common shares of Integrity Gaming Corp. for a cash payment of C$0.46 per share or a total transaction value of US$49 million, which includes repaying US$36 million of Integrity’s outstanding debt.
In addition to this acquisition, AGS also recently announced a reciprocal platform-to-platform agreement with Relax Gaming in which AGS and Relax will become key distribution partners to global operators for each other’s game content.
The Integrity Gaming 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, according to a press release. In fiscal 2017, Integrity generated revenue of approximately US$16 million and pre-synergy EBITDA of approximately US$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, senior vice president of slot products for AGS. “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.”
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.
Meanwhile, under the terms of its partnership arrangement with Relax Gaming, popular products from AGS and its selected partners will be made available to Relax Gaming’s growing network of operators, with AGS reciprocating by hosting games from Relax Gaming and its Silver Bullet and Powered By studios.
“This agreement further builds our presence in Europe with one of the industry’s most forward-thinking platform providers,” said David Lopes, president and CEO of AGS. “We are excited to be able to release our quality proprietary and aggregated content to Relax Gaming and, in turn, receive reciprocal, best-of-breed titles for our expanding operator base. This is an important partnership and we look forward to capitalizing on this opportunity with Relax Gaming.”
Relax Gaming is reportedly well-positioned to become a new breed of supplier, offering fresh content and over 280 games, including proprietary slots titles such as Erik the Red, Zombie Circus and Epic Joker. With a rapidly expanding portfolio, the partnership with AGS stands to benefit not only Relax, but its Silver Bullet and Powered By partners as well.