International Game Technology (IGT) is combining its global gaming and PlayDigital businesses with Ebri to create an “inclusive and diverse” global company.
IGT will separate its Global Gaming and PlayDigital businesses and combine them with Everi. Under the agreement, IGT shareholders are expected to own approximately 54% of the combined business. Everi shareholders will own the remaining 46%.
The move, which values the combined business at $6.2 billion (£4.9 billion/€5.7 billion) on an enterprise value basis, was unanimously approved by the boards of directors of both companies. The transaction is expected to close later this year or early 2025.
Following the closing of the transaction, Everi will change its name to International Game Technology Inc. and will trade on the New York Stock Exchange under the ticker symbol IGT.
Marco Sala, chairman of IGT’s board of directors, said the transaction would bring together two companies with similar business capabilities and potential.
“This transaction brings together two powerful gaming platforms with complementary capabilities, geographic footprint and enhanced growth opportunities.”
IGT Chief Executive Officer Vince Sadusky will lead the combined company, with Eberly Chairman of the Board Michael Rumbolz serving as chairman of the board.
“We are bringing together two businesses with complementary strengths that are stronger and more valuable together,” Sadusky added. “This combination will provide us with a comprehensive and diversified product offering, addressing more aspects of the gaming ecosystem across land-based gaming, iGaming, sports betting and fintech.”
IGT and Everi’s “attractive growth prospects”
The transaction is expected to generate adjusted EBITDA of $1 billion in 2024.
The move aims to make the business a “one-stop shop” for its offerings. Projected pro forma revenues for 2024 are estimated at $2.7 billion, with adjusted EBITDA of about $1 billion per year.
The transaction will result in cost savings of approximately $85 million and a strong balance sheet will provide flexibility for further investments and returning capital to shareholders.
The transaction is expected to generate more than $800 million in annualized adjusted cash flow in the second year and a pro forma adjusted EBITDA leverage ratio of 3.2-3.4x net debt.
Deutsche Bank and Macquarie Capital are investing $3.7 billion in the deal, plus a $500 million revolving credit facility, of which about $1 billion will be used to refinance Eberli’s existing debt, while IGT will receive about $2.6 billion, and the rest will be used to pay financing fees on the combined business.
Strategic Benefits
IGT said the move would enable the company to operate as a purely global lottery business with a “focused and compelling business model” thanks to a “best-in-class” team.
Synergies created by the transaction include an IP portfolio that includes successful gaming franchises across various sectors.
The move will also enable IGT to leverage its sales and distribution network to introduce Everi’s content and fintech solutions to customers outside the United States.