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 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.”