PlayAGS Gears Up for IPO

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PlayAGS has filed an amended S-1 form with the U.S. Securities and Exchange Commission (SEC) for its initial public offering (IPO). The company intends to price its 10.25 million shares in the range of $16 to $18 per share, with an overallotment option for an additional 1.5675 million shares. At the maximum price, the entire offering is valued up to $212.175 million. The company intends to list its shares on the New York Stock Exchange under the symbol AGS.

The underwriters for the offering are Credit Suisse, Deutsche Bank, Jefferies, Macquarie Capital, Merrill Lynch, Citigroup, Nomura, Stifel, SunTrust Robinson Humphrey, Roth Capital Partners, Union Gaming, Williams Capital Group and Apollo Global Securities.

This is a leading designer and supplier of electronic gaming machines (EGMs) and other products and services for the gaming industry. Founded in 2005, PlayAGS historically focused on supplying EGMs, including slot machines, video bingo machines and other electronic gaming devices, to the Native American gaming market, where it maintains an approximately 20% market share of all Class II EGMs.

Since 2014, the company has expanded its product lineup to include Class III EGMs for commercial and Native American casinos, table game products and interactive products.

The expansion into Class III and ancillary product offerings has driven strong growth and momentum in revenue, EGM adjusted EBITDA and its installed base, which have increased by 173%, 158% and 152%, respectively, each year since 2014. For the past 52 weeks, roughly 83% of total revenue was generated from recurring contracted lease agreements whereby PlayAGS places EGMs and table game products at customers’ gaming facilities under either a revenue sharing agreement or fee-per-day agreement, or from recurring revenue generated by these Interactive gaming operations.

The total EGM footprint is 22,015 units (14,544 domestic and 7,471 international).

The company intends to use the net proceeds from this offering to pay down the debt associated with its Cadillac Jack acquisition. The remainder of the proceeds will be put toward working capital and general corporate purposes.

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