IGT and Everi Merge into $6.3 Billion Entity Under Apollo Global Management Creating Diversified Gaming Enterprise

In a major industry move, International Game Technology (IGT) and Everi have confirmed a merger that will see both companies acquired by a new holding company. This entity will be owned by funds managed by affiliates of Apollo Global Management. The merger, which is an all-cash transaction, values the combined businesses at around $6.3 billion, just a bit more than the initial $6.2 billion reported back in February.

How the Merger is Structured

The merger involves a significant restructuring for IGT. First, IGT will separate its gaming division through a taxable spin-off to its shareholders. This gaming business will then be merged with Everi. Post-merger, the combined entity will operate as a private company under the newly formed holding company. This unified enterprise will house IGT’s products like electronic table games and Wheel of Fortune games, alongside Everi’s offerings in bingo and casino gaming.

Everi shareholders are set to benefit significantly from this deal. They will receive $14.25 per share in cash, which represents a 56% premium over Everi's closing share price as of July 25, 2024. Meanwhile, IGT will collect $4.05 billion in gross cash proceeds from this transaction. A considerable portion of these funds will be used to repay debt, with the remaining amount expected to be returned to IGT’s shareholders. This financial strategy aims to fortify IGT’s financial standing and provide substantial returns to its investors.

Once the deal is finalized, IGT will undergo a rebranding. The company will change its name and stock ticker symbol, marking its new identity as a focused lottery business. This shift will position IGT as a leading pure-play lottery company, signaling a new strategic direction for the organization.

Role of De Agostini S.p.A.

De Agostini S.p.A., an Italian holding company and the majority shareholder of IGT, will play a pivotal role in this merger. The company has committed to making a minority equity investment in the newly combined enterprise. This investment demonstrates De Agostini’s confidence in the merger’s potential to create a stronger, more diversified company.

The merger has received unanimous approval from both IGT and Everi’s boards, highlighting the broad support for this strategic move. In light of the new agreement, previous transaction agreements between IGT and Everi have been terminated. This ensures a smooth transition to the new, more beneficial arrangement.

The merger is set to create a major player in the gaming and lottery industries. By combining their resources and expertise, IGT and Everi aim to offer a diversified portfolio of gaming solutions. IGT CEO Vince Sadusky described the new agreement as a positive evolution of their partnership, suggesting that the merger will drive innovation and value in the industry.

Vince Sadusky, IGT PLC CEO, said, “Our new agreement represents a positive evolution of our previously announced transaction with Everi and a successful culmination of the strategic review process that IGT launched last year. With the Apollo Funds, we have found a partner that recognizes the strength of IGT Gaming, the value of our talent and our position in the industry. This transaction will allow IGT Gaming to continue to invest in and enhance its growing core segments while providing customers with a more comprehensive portfolio of offerings. After the closing of this transaction, IGT’s shareholders will continue to own one hundred percent of IGT’s Global Lottery business, which will be positioned for long-term success as a pure-play global lottery player with a more focused, compelling business model and optimized capital structure to drive long-term shareholder value.”

Randy Taylor, Everi President and CEO, added, “We believe this transaction maintains the integrity and strong strategic rationale of our original agreement with IGT, but now also provides significant and certain value to our stockholders as we move forward with the Apollo Funds as our partner. By joining forces with IGT Gaming, we expect to continue to lead, innovate, and provide unparalleled value to our customers as a stronger player in the global gaming, FinTech, and digital industry. Apollo is a respected investment firm with a strong track record in the gaming sector, and they recognize the value of our business and see significant potential in bringing IGT Gaming and Everi together. Under private ownership, we believe we will be better positioned to accelerate the integration of our two organizations for the benefit of our customers and employees.”

Source:

''IGT's Gaming and Digital Business and Everi to Be Acquired Simultaneously by Apollo Funds in All-Cash Transaction'', igt.com, July 26, 2024.