IGT and Everi have inked definitive agreements to separate IGT’s Global Gaming and PlayDigital businesses.
IGT will separate its Global Gaming and PlayDigital businesses through a taxable spin-off to IGT shareholders. These businesses will then merge with Everi, forming a comprehensive global gaming and fintech enterprise.
Upon closing, IGT shareholders are expected to own around 54%, and Everi stockholders about 46% of the combined company. The transaction, valued at about $6.2 billion, received unanimous approval from both IGT and Everi Boards of Directors.
Marco Sala, IGT Executive Chair of the Board, said:
As previously announced, IGT’s Board of Directors embarked on a review of strategic alternatives for our Global Gaming and PlayDigital businesses as a way to unlock the intrinsic value of our portfolio of industry-leading assets. 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 one hundred 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.
Vince Sadusky, IGT CEO, added:
We are bringing together two businesses with complementary strengths that are stronger and more valuable together. 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.
Michael Rumbolz, Everi Executive Chairman, stated:
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. 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.
Key Strategic and Financial Benefits
The merger anticipates delivering substantial, enduring value to the stockholders of the combined entity across various dimensions, such as:
- A comprehensive and diverse product portfolio – a one-stop-shop offering across land-based gaming, iGaming, sports betting, and fintech
- Impressive financial scale with projected pro forma 2024 revenue of approximately $2.7 billion and projected pro forma 2024 Adjusted EBITDA of approximately $1 billion
- Large installed base with approximately 70,000 EGMs today generating significant recurring revenues
- Compelling growth profile with significant synergies, including:
- Premier IP portfolio comprised of some of the most successful game franchises across product verticals
- Opportunity to leverage the global sales team and distribution network of IGT’s Global Gaming and PlayDigital businesses to bring Everi’s existing content and fintech solutions to customers outside the United States
- Approximately $85 million of identified cost savings and opportunities for capital expenditure efficiencies
- Strong balance sheet and substantial cash flow generation to provide flexibility to pursue organic and inorganic investments and return capital to stockholders
- Projected pro forma 3.2-3.4x net debt to 2024 Adjusted EBITDA leverage ratio (including run-rate cost synergies) with a path to rapid de-leveraging
- Expect to generate over $800 million of annual Adjusted cash flow in the second year following the closing, including realized synergies
- Best-in-class team
The merger is contingent on regulatory greenlights, endorsement from Everi’s and IGT’s shareholders, and adherence to customary closing prerequisites. Expected to conclude in late 2024 or early 2025, the merger is poised to empower IGT and Everi by unlocking opportunities in diverse sectors, spanning traditional gaming to fintech, thereby reshaping the existing landscape.
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