The casino gaming device supply business got a little more concentrated this week after Austria’s Novomatic announced a deal to acquire a majority stake in Australian rival Ainsworth Game Technology (AGT).
The sale came after AGT founder and principal shareholder Len Ainsworth (pictured) decided to sell his 172.1m shares in the company, which amounted to 53% of AGT’s share capital, at a price of $2.75 apiece, for a total consideration of around $473m.
AGT will hold an extraordinary general meeting within the next three months to seek formal approval of the deal. Assuming shareholders and regulators find no reason to block the sale, Ainsworth will stay on with AGT as chairman, and AGT’s existing board and management teams also aren’t going anywhere.
In its H1 earnings report covering the six months ending Dec. 31, 2015, the ASX-listed AGT reported revenue of AU $142m, up 27% year-on-year. AGT has a strong position in Australasia and the Americas, with the latter markets a chief engine of AGT’s growth. North America accounted for $43m of AGT’s H1 revenue and Latin America added $37m, representing year-on-year gains of 42% and 64%, respectively.
Novomatic CEO Harold Neumann called the addition of AGT a “milestone” in his company’s international growth strategy. In addition to boosting Novomatic’s market share, Neumann said the “transfer of know-how, contents, high-tech gaming equipment will allow us to further increase our potential in the worldwide gaming market.”
The gaming device industry has undergone a wave of consolidation in recent years, leaving little room for minnows. International Game Technology hooked up with GTECH in a $6.4b deal, while Scientific Games paid $1.5b for WMS Industries, then followed that up by paying $5.1b to absorb Bally Technologies, which itself had only just finished paying $1.3b for rival SHFL Entertainment, and Aristocrat Leisure paid $1.28b for Video Gaming Technologies. Next?