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AGS to Acquire Integrity Gaming

AGS to Acquire Integrity Gaming

Gaming supplier AGS had two big announcements last month.

First, AGS announced it will acquire Integrity Gaming Corporation, a Vancouver, Canada-based route operator with a footprint of 2,700 Class II and Class III games in Oklahoma and Texas, for a cash payment of $49 million, or 46 cents per share. The price includes repayment of $36 million in outstanding debt for Integrity.

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, AGS expects that adjusted EBITDA will grow at approximately 15 percent on an annualized basis, beginning in fiscal 2019.

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.

The second announcement was an agreement for AGS to provide third-party slot content to the Rank Group covering its Mecca Bingo and Grosvenor Casino brands.

Under the agreement, AGS’s iGaming Platform will provide the Rank Group with an aggregation solution, as well as access to AGS’ full library of content partners, including more than 600 games from developers like 1×2 Gaming, Ainsworth Game Technology, Gaming Realms and Reflex Gaming, among others.

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