• Inspired Entertainment, a solution provider for casinos and sports betting firms, was expected to acquire PlayAGS for $10 per share, or $370 million altogether.
• As a result of the failed transaction, PlayAGS’s stock experienced a precipitous decline.
• Recent Q2 data from AGS revealed that the company’s revenue climbed by 1% year-over-year.

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The Original Proposition by Inspired Was $370 Million

In August, Inspired made a formal bid to acquire PlayAGS for $10 per share, totaling $370 million. A Securities and Exchange Commission Form 8-K found, however, that no transaction arose from the discussion. 

The shares of PLayAGS increased by 34% following the announcement of the proposed acquisition, but the recent fallout had the reverse impact.

In a note to a client, Edward Engel, an analyst at Roth Capital, claimed that since Inspired proposed $10 per share, PlayAGS trades for approximately $6. 

However, Engel highlighted that the purchase could be advantageous for Inspired because an all-cash sale “would increase INSE’s FCF per share by 75%.” 

PlayAGS has declared that it will not comment on whether it is in discussions with other parties regarding a takeover. However, according to Engel, the discussions have demonstrated that PlayAGS is open to hearing alternative bids.

AGS Released Its Q2 Report

AGS presented its Q2 report at the beginning of August, which showed that the company’s revenue climbed by 1% year-over-year to $46.2 million. Domestic EGM RPD climbed sequentially by 6%, marking the seventh consecutive quarter in which domestic EGM RPD exceeded $30 million. 

Adjusted EBITDA was $34.1 million, a 6% increase year-over-year. David Lopez, CEO and president of AGS, remarked that the rise is a direct result of investments made in R&D, sales, and product management teams over the past two years while discussing the company’s second-quarter results.

Even though the global economy was moving in an unclear way and there was “uncertainty over the health of the customer,” AGS remained stable, according to Lopez. 

Before announcing its second-quarter results, the National Association of Business Resources recognized the company as the finest and brightest place to work in the country and Atlanta. AGS was one of 139 national winners out of over a thousand companies submitted. Atlanta was home to 102 businesses, with AGS being the only gaming company.

Lopez acknowledged the high award by stating that the business is once again thrilled to be recognized. He stated that AGS has been exerting great effort to ensure that its workplace is inviting and to foster a “culture of caring individuals.”

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