IGT to merge Global Gaming and PlayDigital divisions with Everi in $6.2bn deal

IGT has confirmed it will merge its Global Gaming and PlayDigital businesses with Everi in a $6.2bn deal which will see the supplier bring an end to its strategic review into the two divisions.

Under the terms of the deal, IGT will separate the Global Gaming and PlayDigital businesses via a taxable spin off to IGT shareholders, before immediately combining the business with Everi.

IGT shareholders will own around 54% while Everi shareholders are expected to own approximately 46% of the shares of the combined firm. 

IGT will receive around $2.6bn in cash that will be funded with the proceeds of debt incurred by the combined company. The firm added that it expects to allocate around $2bn to debt repayment.

In total, IGT said the transaction implies an enterprise value for the two businesses of $4bn and $2.2bn for Everi.

Financing commitments totaling $3.7bn, plus a $500m revolver, have been provided to the combined company by Deutsche Bank and Macquarie Capital.

Around $1bn of this will be used to refinance Everi’s existing debt, $2.6bn to be distributed to IGT and the remainder used to pay the combined company’s financing fees.

The deal has been approved unanimously by all voting members of each firm’s respective board of directors, with the deal expected to close either in late 2024 or early 2025. 

Once the deal closes, Everi will change its name to International Game Technology Inc. and will also trade on the New York Stock Exchange under the name IGT. 

The remaining IGT business, which will comprise the global lottery arm and corporate support functions, will also change its name, which has yet to be disclosed, while continuing to trade on the NYSE under a new ticket.

Vince Sadusky, IGT CEO, will lead the new combined company, which will be headquartered in Las Vegas, while current IGT executive VP of strategy and corporate development, Fabio Celadon, will serve as CFO.

Everi CEO Randy Taylor will remain on the combined company’s board of directors, with Everi CFO Mark Labay assuming the role of chief integration officer. 

Michael Rumbolz, Everi executive chairman, will be chairman of the new combined company. The new board will have 11 members, including six independent directors, a requirement set out by the New York Stock Exchange. 

In terms of the remaining IGT business, Sadusky will continue as CEO until the transaction closes with the board searching for his replacement. With a search for his replacement currently underway.

Marco Sala will continue as executive chair of the IGT board of directors, while the rest of IGT’s executive team will remain the same, except that Renato Ascoli will assume the role of CEO of the global lottery business. 

The merger aims to create a “one-stop shop” across land-based, igaming, sports betting, and fintech with projected pro forma 2024 revenue of around $2.7bn and an adjusted pro forma EBITDA of approximately $1bn. 

IGT said it had identified around $85m in cost savings and “opportunities for capital expenditure efficiencies”.

The deal is also expected to create over $800m in annual adjusted cash flow in its second year, with a projected pro forma 3.2x. to 3.4x net debt to adjusted EBITDA leverage ratio. 

On the deal, IGT executive chair Sala commented: “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.”

Everi executive chair Rumbolz added: “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.”