In a bold strategic initiative, International Game Technology PLC (IGT) has announced plans to spin off its Global Gaming and PlayDigital businesses. These operations will subsequently merge with Everi Holdings Inc., a leading supplier of technology solutions for the gaming and financial transaction industries. This transformative move seeks to create a new powerhouse in the gaming sector.
Upon the completion of the merger, IGT shareholders are poised to assume majority control, holding approximately 54% of the shares in the newly combined entity, while Everi shareholders will retain the remaining 46%. The merger, which has been evaluated at $6.2 billion based on enterprise value, has received unanimous approval from the boards of directors of both IGT and Everi. If all goes according to plan, the transaction is slated for closure later this year or in early 2025.
In anticipation of the finalization of the deal, Everi will undergo a significant rebranding. The company is set to adopt the name International Game Technology Inc. and will list its shares on the New York Stock Exchange under the ticker symbol IGT, signifying the unified corporate identity and business focus of the enlarged group.
The leaders at the helm of this venture have shared their optimistic visions for the merger. Marco Sala, executive chair of IGT’s board, underscored the alignment and potential of the two merging companies, emphasizing that this move will bring together two robust gaming platforms that will benefit from their complementary capabilities, geographical footprints, and enhanced growth prospects.
Vince Sadusky, the Chief Executive Officer of IGT, will take the reins of the integrated company once the deal is finalized. Meanwhile, Everi’s Executive Chairman, Michael Rumbolz, is set to preside over the board of directors. Sadusky painted a picture of synergy and strength, asserting that the combination will create a comprehensive and diverse product offering that spans the vast gaming ecosystem, including land-based gaming, iGaming, sports betting, and financial technology solutions.
The purpose of this strategic business maneuver is to craft a “one-stop shop” for the diverse range of offerings provided by the businesses. Projections for the combined company are impressive, with estimated projective pro forma revenue reaching around $2.7 billion for the year 2024, accompanied by an adjusted EBITDA of approximately $1 billion.
Financially, the union is set to generate substantial cost savings of about $85 million and a strong balance sheet, enhancing the company’s capacity for further investment and returns for stockholders. Once synergies are fully realized, the merger is expected to facilitate over $800 million of annual adjusted cash flow by the second year, alongside a projected pro forma net debt to adjusted EBITDA leverage ratio in the range of 3.2-3.4x.
A substantial financing arrangement has been secured for the deal, with Deutsche Bank and Macquarie Capital committing a total of $3.7 billion alongside a $500 million revolving credit facility. Of these funds, approximately $1 billion will be allocated towards refinancing Everi’s existing debt, while IGT stands to receive around $2.6 billion. The remaining funds are earmarked for covering the financing fees associated with the merger.
IGT expressed confidence that the reshaping move would enable the company to operate as a focused global lottery business characterized by a compelling business model and a team that is termed “best-in-class”. The strategic melding of the businesses is set to yield a rich portfolio of intellectual property, comprising successful game franchises that span a multitude of verticals within the gaming sector.
Importantly, this merger unlocks new potential for IGT, granting the capacity to leverage its extensive sales and distribution network to bring Everi’s gaming content and financial technology solutions to customers beyond the US market. Fans of the companies and industry stakeholders are now watching closely as two major players unite to chart a new course in the competitive landscape of the gaming industry.
