Posted on: November 14, 2023, 04:47h.
Last updated on: November 14, 2023, 04:47h.
Ainsworth Game Technology, the Australian gaming device maker, is contemplating moving private, removing its shares from the Australia Stock Exchange (ASX).
In a filing with Australian securities regulators, the gaming company revealed that it’s considering strategic alternatives and that it’s hired Macquarie Capital to assist with that process, which is still in its formative stages.
The process will look to review and assess all strategic alternatives which could assist the company in maximising shareholder value,” according to a statement issued by Ainsworth. “The strategic review will include a broad range of potential organic and inorganic alternatives and there can be no assurance that any transaction will result.”
The company added that, as of yet, it has not received inquiries from other companies about taking it private.
“The company remains committed to driving sustained, long-term growth through delivering on our product strategy and continued investments in research and development,” added the slot machine manufacturer.
Ainsworth Adds to Slot Machine M&A Speculation
To date, there hasn’t been much in the way of confirmed deals, but analysts believe the slot machine is ripe for consolidation. Ainsworth could participate in that trend.
There are tailwinds for gaming device manufacturers. Those include consumers remaining dedicated to casino visits, which provides operators with much-needed resiliency. Additionally, analysts believe supply chain pressures in the industry are easing.
Specific to Ainsworth, the company could be an attractive target for suitors looking for an acquisition owing to its North America exposure, which includes an expanding research and development footprint in Las Vegas as well as opening new studios in Texas and Mexico.
For the six months ending June 30, Ainsworth’s North American sales jumped 13% on a year-over-year basis with the region accounting for 48% of the company’s sales. That coupled with revenue increases in Asia and New Zealand helped offset some weakness in the company’s home market.
Who Could Be Interested in Ainsworth?
As Ainsworth noted in the regulatory filing, it has yet to hold talks with other companies regarding privatization. There’s speculation that Australia-based gaming machine manufacturer Novomatic would be the most logical suitor for Ainsworth.
Via a 2018 transaction, Novomatic became the majority owner of Ainsworth. Additionally, Ainsworth CEO Harald Neumann previously served as an executive at Novomatic prior to taking the top spot at Ainsworth. Those factors could fuel speculation about a combination. At the very least, any material transaction involving Ainsworth would require the approval of Novomatic.
Spheria Asset Management, Allan Gray, REST and HESTA are among Ainsworth’s other large investors. There’s no word yet on whether or not they favor the company going private.