IGT will spin off its Global Gaming and PlayDigital businesses, which will then combine with Everi. Under the agreement, IGT shareholders are expected to own around 54% of shares in the combined business. Everi stockholders will own the remaining 46%.
The move, which values the merged businesses at $6.2bn (£4.9bn/€5.7bn) based on enterprise value, has been approved unanimously by both companies’ boards of directors. The deal is expected to close either later this year or in early 2025.
Following the close, Everi will change its name to International Game Technology Inc. It will also trade on the New York Stock Exchange under the ticker IGT.
Marco Sala, executive chair of IGT’s board, said the deal would integrate two companies with similar business capabilities and potential.
“The transaction will combine two robust gaming platforms with complementary capabilities, geographic footprints and enhanced growth opportunities.”
IGT chief executive Vince Sadusky will lead the combined company. In addition, Everi executive chairman Michael Rumbolz will serve as chairman of the board of directors.
“We are bringing together two businesses with complementary strengths that are stronger and more valuable together,” Sadusky added. “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.”
“Compelling growth prospects” for IGT and Everi
The aim of the move is to create a “one-stop shop” for the businesses’ offerings. Projective pro forma revenue for 2024 stands at an estimated $2.7bn, as well as adjusted EBITDA of around $1bn for the year.
Around $85m in cost savings will be created. The strong balance sheet will also allow for flexibility for further investment and return capital to shareholders.
The deal is expected to create over $800m of annual adjusted cash flow in the second year, as well as projected pro forma 3.2-3.4x net debt to adjusted EBITDA leverage ratio.
Deutsche Bank and Macquarie Capital will commit $3.7bn to the deal, as well as a $500m revolving loan facility. Around $1bn of that will be used to refinance Everi’s existing debt, while IGT will receive around $2.6bn. The rest will be used to pay the financing fees of the combined businesses.
Strategic benefits
IGT says the move will allow for the company to operate as a pure-play global lottery business with a “focused, compelling business model” thanks to a “best-in-class” team.
Synergies created by the deal include an IP portfolio that includes successful game franchises across a range of verticals.
The move also allows for IGT to leverage its sales and distribution network to allow Everi’s content and fintech solutions to be introduced to customers outside of the US.
Original article: https://igamingbusiness.com/strategy/ma/igt-everi/
