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home / articles / IGT - IGT's Global Gaming and PlayDigital Businesses to Combine with Everi Creating a Comprehensive Global Gaming and FinTech Enterprise | Benzinga


IGT - IGT's Global Gaming and PlayDigital Businesses to Combine with Everi Creating a Comprehensive Global Gaming and FinTech Enterprise | Benzinga

  • Business combination creates a comprehensive and diverse portfolio of high-performing land-based, digital, and fintech gaming products and services
  • Complementary offering coupled with global reach provides compelling growth prospects with significant synergy opportunities
  • Attractive recurring revenue profile and strong profit margins, balance sheet, and cash flows provide flexibility to allocate capital to drive long-term shareholder value creation
  • IGT CEO Vince Sadusky to lead combined company with executives from both companies in key leadership roles; Everi Executive Chairman Michael Rumbolz to serve as chairman of the board of directors of the combined company
  • IGT Global Lottery business to operate as a pure play global lottery player with focused, compelling business model and optimized capital structure to drive long-term shareholder value

LONDON and LAS VEGAS, Feb. 29, 2024 /PRNewswire/ -- International Game Technology PLC ("IGT") (NYSE:IGT) and Everi Holdings Inc. (NYSE:EVRI) ("Everi") today announced their entry into definitive agreements pursuant to which IGT will separate its Global Gaming and PlayDigital businesses by way of a taxable spin-off to IGT shareholders and then immediately combine such businesses with Everi to create a comprehensive and diverse global gaming and fintech enterprise. Under the terms of the agreements, at closing, IGT shareholders are expected to own approximately 54% and Everi stockholders are expected to own approximately 46% of the shares in the combined company. The transaction has been approved unanimously by all voting members of the IGT Board of Directors and Everi Board of Directors. The deal values the combined businesses at approximately $6.2 billion on an enterprise value basis.



"As previously announced, IGT's Board of Directors embarked on a review of strategic alternatives for our Global Gaming and PlayDigital businesses as a way to unlock the intrinsic value of our portfolio of industry-leading assets," said Marco Sala, IGT Executive Chair of the Board. "The transaction announced today is a key milestone in that process. The transaction will combine two robust gaming platforms with complementary capabilities, geographic footprints, and enhanced growth opportunities. It also facilitates the separation of IGT's Global Gaming and PlayDigital businesses from our Global Lottery business, resulting in a pure play global lottery business. After closing, IGT's shareholders will continue to own one hundred percent of IGT's Global Lottery business, which is positioned for long-term success, and will own a majority of a combined company that offers global gaming, digital and fintech."

"We are bringing together two businesses with complementary strengths that are stronger and more valuable together," added Vince Sadusky, IGT CEO. "The combination results in a comprehensive and diverse product offering, addressing more aspects of the gaming ecosystem across land-based gaming, iGaming, sports betting, and fintech. The creation of separate gaming and lottery companies, each with experienced management teams and simplified business models, better positions each company to service customers and create significant value for stakeholders." 

"We believe this merger combines two highly complementary businesses in a transformational manner, creating a global, land-based and digital gaming, fintech and systems business. We expect the combined company will deliver a comprehensive range of products and services that will engage gaming patrons and drive efficiencies and revenues to our customers," stated Michael Rumbolz, Everi Executive Chairman.

Key Strategic and Financial Benefits

The combination is expected to generate significant long-term value for stockholders of the combined company along many dimensions, including:

  • A comprehensive and diverse product portfolio – a one-stop-shop offering across land-based gaming, iGaming, sports betting, and fintech
  • Impressive financial scale with projected pro forma 2024 revenue of approximately $2.7 billion and projected pro forma 2024 Adjusted EBITDA of approximately $1 billion
    • Large installed base with approximately 70,000 EGMs today generating significant recurring revenues
  • Compelling growth profile with significant synergies, including:
    • Premier IP portfolio comprised of some of the most successful game franchises across product verticals
    • Opportunity to leverage the global sales team and distribution network of IGT's Global Gaming and PlayDigital businesses to bring Everi's existing content and fintech solutions to customers outside the United States
    • Approximately $85 million of identified cost savings and opportunities for capital expenditure efficiencies
  • Strong balance sheet and substantial cash flow generation to provide flexibility to pursue organic and inorganic investments and return capital to stockholders
    • Projected pro forma 3.2-3.4x net debt to 2024 Adjusted EBITDA leverage ratio (including run-rate cost synergies) with a path to rapid de-leveraging
    • Expect to generate over $800 million of annual Adjusted cash flow in the second year following the closing, including realized synergies
  • Best-in-class team

Summary of the Transaction

The transaction will be executed through a series of steps pursuant to which IGT will spin off a subsidiary owning its Global Gaming and PlayDigital businesses to IGT shareholders. That entity will then combine with Everi, with IGT shareholders receiving shares of Everi common stock and Everi continuing as the parent company. IGT shareholders will receive approximately 103.4 million Everi shares, resulting in an approximate 54% ownership interest in the combined company with existing Everi stockholders owning the balance. After closing, Everi will change its name to International Game Technology, Inc. and will trade on the NYSE under the ticker IGT.

In connection with the transaction, IGT will receive approximately $2.6 billion in cash that will be funded with the proceeds of debt incurred by the combined company. IGT expects to allocate approximately $2 billion to IGT debt repayment with the remaining amount allocated to separation and divestiture expenses, tax leakage and general corporate purposes. The transaction implies an enterprise value for IGT's Global Gaming and PlayDigital businesses of approximately $4.0 billion, and an enterprise value for Everi of approximately $2.2 billion.

Financing commitments of $3.7 billion, plus a $500 million revolver, are being provided by Deutsche Bank and Macquarie Capital to the combined company. Approximately $1.0 billion of the proceeds will be used to refinance Everi's existing debt, approximately $2.6 billion of the proceeds will be distributed to IGT, and the remainder will be used to pay the combined company's financing fees.

The transaction has been approved unanimously by all voting members of the IGT Board of Directors and Everi Board of Directors. The transaction is subject to receipt of regulatory approvals, the approval by Everi stockholders and IGT shareholders, and satisfaction of other customary closing conditions, and is expected to close in late 2024 or early 2025. De Agostini S.p.A., which controls approximately 60% of the voting ...

Full story available on Benzinga.com

Stock Information

Company Name: International Game Technology
Stock Symbol: IGT
Market: NYSE
Website: igt.com

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