US casino equipment supplier bought by Japan’s Angel Holdings

US casino equipment supplier bought by Japan's Angel Holdings

U.S.-based casino equipment supplier Gaming Partners International (GPI) had a successful second quarter this year. Its net income grew to $2.5 million and its revenue increased by 51.6% to $24.7 million. That made GPI more valuable and it took advantage of its position to make a deal.

US casino equipment supplier bought by Japan's Angel HoldingsThe company is putting the final touches on an acquisition that will see it be handed over completely to Angel Holdings GK, a Japanese firm that makes and supplies card games and playing cards for the retail and gaming markets. In the deal, Angel will purchase 100% of the company for cash and it will then be absorbed by an Angel subsidiary in the U.S., AGL Nevada Corp, to which Angel holds 100% of the stake. Following the acquisition, GPI’s brand identity will be kept intact.

Angel is going to pay $13.75 per share for the all-cash deal. With 7.96 GPI shares outstanding, the agreement will see $109.5 million change hands.

According to Angel, “The merger agreement provides for a go-shop provision under which, subject to certain limitations and conditions contained in the merger agreement, GPIC and its board of directors may actively solicit, receive, evaluate and potentially enter into negotiations with parties that offer alternative proposals to the proposed merger transaction until February 2, 2019.”

The purchase isn’t yet finalized. It still has to be approved by shareholders and relevant gaming authorities. GPI will also have to turn over to Angel all gaming licenses it holds for the deal to be consummated.

While the second quarter saw GPI report a significant improvement in its finances, the third quarter hasn’t been as kind. It only earned a net profit of $1.5 million, down from the $2.2 million it reported in the same period last year. That decline, according to the company, was due to a decrease in sales across the Asia-Pacific region.

Sales decreased in the most recent quarter to $7.3 million. For Q3 2017, it recorded sales of just under $11.6 million. GPI stated of the drop, “The decrease in revenues was primarily attributable to decreases in casino currency sales and gaming furniture sales partially offset by increases in all other product lines.”