Investment Analysis: Emmett Expresses Concerns About PlayAGS Deal
Date: 2024-05-15 Author: Leon Pierce Categories: PAYMENT SOLUTIONS
Disagreement with Brightstar Capital Partners
Emmett Investment Management LP has expressed its concerns regarding PlayAGS's proposed take-private acquisition by Brightstar Capital Partners. In an open letter sent to PlayAGS shareholders, Emmett expressed his intention to vote against the deal, believing it undervalued the company.
Reasons for concern
In a letter published May 14, Emmett highlighted his concerns about the Brightstar deal and its potential impact on PlayAGS shareholders. He argues that the proposed deal does not reflect the true value of PlayAGS and does not reflect its achievements and growth prospects.
Optimistic outlook for the future
Despite this, Emmett acknowledges PlayAGS' positive first-quarter results, including strong organic EBITDA growth ahead of industry standards. He is optimistic about the company's future performance, especially in the context of its success in the interactive segment and expansion of its product portfolio.
Doubts about the fairness of the deal
Emmett also raises doubts about the timing of Brightstar's filing, which could have affected the market's perception of PlayAGS's value, possibly undervaluing the company's shares. He highlights PlayAGS' expected benefits from the market disruption following the IGT-Everi merger, which could lead to increased market share and revenue potential for the company.
Emmett argues that Brightstar's proposal does not recognize the company's significant growth potential and could result in shareholders losing future value. In the context of the appointment of Adam Chibib as the new Chairman of PlayAGS, the situation becomes more complex and investors expect further developments.
