IGT , Everi to Merge
IGT will spin off its gaming and digital divisions to create a new company in combination with Everi Holdings , Inc .
In a blockbuster deal announced February 29 , International Game Technology PLC will spin off its slot supply and digital gaming businesses from its lottery business to create a separate company in combination with Las Vegas-based Everi Holdings , Inc . in a $ 6.2 billion transaction .
The new company will retain the name of IGT . IGT ’ s lottery division will take on a new name and will trade under a new symbol on the New York Stock Exchange .
IGT ’ s lottery division was itself created through merger , when IGT was acquired by international lottery supplier GTECH in 2014 . Everi was created that same year through a merger of slot supplier Multimedia Games with fintech leader Global Cash Access .
IGT will separate its Global Gaming and PlayDigital divisions by way of a taxable spin-off to IGT shareholders and then immediately combine the businesses with Everi to create “ a comprehensive and diverse global gaming and fintech enterprise ,” according to a press statement from IGT .
Under the terms of the agreements , at closing , IGT shareholders are expected to own approximately 54 percent and Everi stockholders approximately 46 percent of the shares in the combined company . The transaction has been approved unanimously by the boards of both companies . The deal values the combined businesses at approximately $ 6.2 billion on an enterprise value basis .
The transaction follows IGT ’ s previous announcement that it was reviewing strategic alternatives to the gaming and digital businesses “ as a way to unlock the intrinsic value of our portfolio on industry-leading assets ,” said IGT Chairman Marco Sala in the press statement .
“ 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 100 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 IGT CEO Vince Sadusky . “ 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 ,” said Michael Rumbolz , executive chairman of Everi Holdings . “ 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 .”
Initial reactions from Wall Street were positive . “ The deal implies upside value for both names over time , given the compressed valuations of 4.4X and 5.5X our
“ We are bringing together two businesses with complementary strengths that are stronger and more valuable together .”
— Vince Sadusky , CEO , IGT
2024E EBITDA for EVRI and IGT , respectively ,” wrote David Katz of Jefferies Group . “ We believe the combined company could utilize the stronger soft and hard resources from both entities , and bring the necessary scale to the market to compete with the leaders in gaming content and equipment . We expect both could trade higher over time .”
IGT shareholders will receive approximately 103.4 million Everi shares , resulting in an approximate 54 percent 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 .
Sadusky to Lead Combined Company
Post-closing , Sadusky will lead the combined company , which will be headquartered in Las Vegas and managed by a best-in-class management team and top operational leadership from IGT and Everi .
Current IGT EVP Strategy and Corporate Development Fabio Celadon will serve as CFO of the combined company . Current Everi CEO Randy Taylor will be a member of the combined company board of directors . Current Everi CFO Mark Labay will assume the role of chief integration officer . Michael Rumbolz , Everi executive chairman , will be chairman of the board of directors of the combined company , which will have 11 total members including six independent directors as required by New York Stock Exchange listing standards . Six of the 11 members will be initially appointed by IGT , including CEO Vince Sadusky , and three of which will be appointed by De Agostini S . p . A ., pursuant to an investor rights agreement . The balance of the directors will be initially appointed by Everi , and will include Everi President and CEO Randy Taylor .
“ I am personally very excited about the announcement of the merger between IGT Gaming , PlayDigital and Everi ,” IGT COO of Gaming Nick Khin told GGB . “ The new combined organization will have a really unique , diverse and comprehensive product portfolio , setting us apart from our peers and competitors .
“ Our customers have also expressed to me a lot of excitement about the potential transaction . We obviously have a lot of work to do on closing the deal and hope to complete the transaction late 2024 or early 2025 .”
46 Global Gaming Business APRIL 2024