RGB International Berhad, a prominent gaming machine distributor based in Malaysia, has recently finalized an agreement to acquire 86 gaming machines installed in Philippine casinos, along with a substantial stake in their revenue. This strategic move underscores RGB’s commitment to expand its presence in key markets despite the challenges posed by the COVID-19 pandemic.
Key Details of the Acquisition
RGB International Berhad has announced a significant acquisition deal with Timor Holdings S.A., a company incorporated in Timor-Leste. Under this agreement, RGB will pay a total consideration of US$2.2 million to Timor Holdings S.A. for the acquisition of 86 gaming machines currently operational in Philippine casinos. Additionally, RGB will secure a 20% stake in the revenues generated by these machines through an existing Product Leasing Agreement (PLA).
The deal also includes provisions for full ownership of the gaming machines upon the conclusion of the PLA. Notably, Timor Holdings S.A. has strong ties to RGB’s own directors, including Lim Tow Boon and Dato’ Seri Chuah Kim Seah, emphasizing the strategic alignment of this acquisition with RGB’s business objectives.
Strategic Rationale and Investment Outlook
RGB International Berhad has articulated clear reasons behind this acquisition strategy. Firstly, the company views this investment as an opportune entry into the Philippine gaming market, particularly as the impact of the COVID-19 pandemic begins to wane. The machines are strategically placed in top-performing gaming outlets, which positions RGB favorably to capitalize on growing market demand.
Moreover, RGB anticipates a swift return on investment within the next 24 months, underscoring the financial prudence of this acquisition. The company expects the addition of these gaming machines to positively contribute to the earnings of its Technical, Support and Management (TSM) division, further strengthening RGB’s market position in the region.
Market Expansion and Diversification
This acquisition marks another milestone in RGB’s broader strategy to expand and diversify its market presence. RGB International Berhad is already a key distributor of gaming machines in the Philippines, representing reputable brands such as Aristocrat and Light & Wonder. Notably, the company’s recent collaboration with KL Saberi, the slot machine brand of Korea’s Kangwon Land, highlights its commitment to enhancing market visibility and product offerings.
The strategic acquisition of these 86 gaming machines underscores RGB’s proactive approach to leverage emerging market opportunities, capitalizing on the resurgence of the gaming sector post-pandemic. By augmenting its machine placement portfolio, RGB International Berhad is poised to strengthen its foothold in the dynamic and competitive Philippine gaming industry.
RGB International Berhad’s acquisition of 86 gaming machines in Philippine casinos represents a strategic investment to capitalize on market recovery and expansion opportunities. The company’s forward-looking approach, coupled with its strong industry partnerships and market expertise, positions RGB favorably for sustained growth and profitability. As the gaming landscape evolves, RGB remains committed to driving innovation and value creation within the gaming industry, leveraging strategic acquisitions and market diversification to deliver long-term shareholder value.