In a groundbreaking move that is set to reshape the gaming and financial technology (fintech) sectors, International Game Technology (IGT) will embark on a strategic redirection. IGT’s Global Gaming and PlayDigital units will be spun off and subsequently integrated with Everi Holdings Inc., a leading supplier of gaming products and financial technology solutions.
This forward-thinking transaction aligns two innovative companies in a partnership of equity, with IGT shareholders poised to claim approximately 54% of the shares in the new enterprise, and Everi shareholders securing the remaining 46%. This agreement projects the combined entity at a staggering $6.2 billion in enterprise value—a testament to the robust nature and potential of this consolidation.
The merger, having received unanimous approval from the boards of directors of both companies, is anticipated to finalize either late this year or at the onset of 2025. Following the conclusion of this deal, Everi will rebrand itself as International Game Technology Inc. and will continue its journey on the New York Stock Exchange (NYSE), trading under the ticker ‘IGT.’
Marco Sala, the Executive Chair of IGT’s board, expressed optimism about the merger, highlighting the symbiotic nature of this union. “The transaction will combine two robust gaming platforms with complementary capabilities, geographic footprints, and enhanced growth opportunities,” Sala noted, illustrating the benefits that entail from merging these two industry powerhouses.
At the helm of the restructured company will be IGT’s Chief Executive Vince Sadusky, with Everi’s Executive Chairman Michael Rumbolz assuming the role of Chairman of the Board of Directors. Sadusky emphasized the strategic advantage of bringing together the diverse and complementary strengths of both businesses, “resulting in a comprehensive and diverse product offering, addressing more aspects of the gaming ecosystem across land-based gaming, iGaming, sports betting, and fintech.”
The merger is poised to establish a “one-stop-shop” for their extensive offerings, boasting a projective pro forma revenue of approximately $2.7 billion and an Adjusted EBITDA of $1 billion for the year 2024. Additionally, a significant $85 million in cost savings is forecasted, enhancing the financial flexibility for future investments and bolstering returns for stockholders.
Further financial fortitude is predicted with an expectation of generating over $800 million of annual adjusted cash flow by the second year after the merger. This will be bolstered by a projected pro forma net debt to Adjusted EBITDA leverage ratio of 3.2-3.4x.
To finance this ambitious endeavor, Deutsche Bank and Macquarie Capital are committing a substantial $3.7 billion alongside a $500 million revolving credit facility. These funds will serve to refinance Everi’s current debt, inject capital into IGT, and cover the financing fees for the unified enterprises.
IGT articulates that this strategic move will enable it to hone its focus on operating as a pure-play global lottery business. The company anticipates leveraging a highly capable team to deliver a compelling business model that is best-in-class in its segment.
This strategic deal is also expected to spawn synergies across the intellectual property portfolio, amplifying game franchises across various verticals. What’s more, IGT will harness its expansive sales and distribution network to introduce Everi’s premier content and fintech solutions to burgeoning markets outside of the United States.
Two industry leaders are embarking on a new journey with this merger, promising to create a titan in the gaming and fintech industries that offers comprehensive solutions and drives unparalleled growth. The industry is on the brink of witnessing the evolution of a partnership that aims to deliver innovation, value, and an enriched gaming experience to customers worldwide.
