GGRAsia – AGEM Index back to decline in July

AGEM Index back to decline in July

Aug 11, 2014 Newsdesk Industry Talk, Latest News, Top of the deck, World

After increasing for only one month, the AGEM Index dropped in July when compared to the previous month. The composite index fell to 183.61 in July, down 1.73 points, or 0.9 percent, from June.

The AGEM Index has now seen month-to-month declines in five of the first seven months of the year.

Compared to July 2013, the index is up 3.6 percent, said the Association of Gaming Equipment Manufacturers (AGEM) and research firm Applied Analysis LLC, which compile the index.

In July, 11 of the 17 global gaming equipment manufacturers reported decreases in stock price when compared to the previous months, with five down by more than 10 percent.

Of the six companies that reported month-to-month gains in stock price, three were up by more than 5 percent.

International Game Technology (IGT) saw its stock increase by 6.4 percent to US$16.93, following news of the merger with Italian GTech SpA.

Shares of Australian gaming supplier Aristocrat Leisure Ltd, which in July announced the acquisition of Video Gaming Technologies Inc for about US$1.28 billion, went up 8.4 percent during the month.

In contrast, Bally Technologies Inc reported a stock price of US$60.17, down 8.4 percent in July, while shares of Crane Co dropped by 7.7 percent.

Last month, two major acquisitions were announced within the gaming equipment supplier industry as consolidation continues.

In mid-July, GTech announced plans to purchase IGT for a reported US$6.4 billion. Under the agreement, GTech will pay US$4.7 billion in cash and stock and assume US$1.7 billion of IGT’s net debt.

On August 1, Scientific Games Corp announced it was acquiring Bally Technologies for US$5.1 billion. As part of the deal, Scientific Games will acquire Bally Technologies’ outstanding shares for US$3.3 billion and assume the company’s debt of US$1.8 billion.

The transaction will be Scientific Games’ second acquisition of a slot manufacturer in the past year and is expected to close in 2015 after gaining the necessary approvals.

The mix of participants in the AGEM Index will be adjusted to reflect recent consolidation in the industry as the transactions near completion in the coming year, it was said in a statement.

The AGEM Index is computed based on the month-end stock price (adjusted for dividends and splits) of each company and weighted based on approximation of market capitalisation. It is based on a 100-point value as of January 2005.