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IGT will spin off its land-based and online gaming businesses, which will be combined with Everi in a $6.2bn merger agreement.

Under the terms of the deal, IGT and Everi shareholders will own 54% and 46% respectively of the combined entity.

IGT chief executive Vince Sadusky (pictured) will lead the new business, with Everi executive chairman Michael Rumbolz staying on to serve as chairman of the board. Executives from both companies will remain in “key leadership roles”.

IGT’s remaining Global Lottery division will continue to operate as a pure play global lottery business, with an “optimised capital structure”.

After closing, IGT shareholders will continue to own 100% of the standalone lottery business.

The transaction has been unanimously approved by both companies’ board of directors. The deal gives the combined business an enterprise value of $6.2bn.

It has not yet been revealed which brand the new entity will operate under after the closing of the deal.

“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,” said IGT executive chair Marco Sala.

“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.

In June 2023, IGT announced it was pursuing strategic alternatives for its gaming divisions that could result in a sale or merger of the segments.

This came about due to fears that the company’s stock performance did not reflect its true value.

Strategic benefits of agreement

IGT highlighted several strategic benefits of the merger including scale, synergies and a newly comprehensive product portfolio.

Following the closing of the deal, the combined entity will be one of the largest gaming suppliers in the world.

Revenue in 2024 is projected to stand at $2.7bn, reflecting an EBITDA of approximately $1bn.

The business highlighted its 70,000 currently installed electronic gaming machines, which were cited as a base for generating recurring revenue.

IGT also pointed to the “compelling growth profile” of the company post-merger. This includes the impact of synergies.

As proof of this, the supplier highlighted around $85m in cost savings and potential capital expenditure efficiencies, as well as ability to use IGT’s sales team to bring Everi’s solutions to new customers.

“We are bringing together two businesses with complementary strengths that are stronger and more valuable together,” added Sadusky.

“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.”

New leadership structure and governance

Under the agreement, the combined business will be headquartered in Las Vegas, where both businesses already have offices.

Current IGT EVP of strategy and corporate development Fabio Celadon will serve as chief financial officer of the company.

Everi CEO Randy Taylor will join the board of directors, while CFO Mark Labay will assume the role of chief integration officer.

The post-closing board will consist of 11 total members, including six independent directors, as required by the listing rules of the New York Stock Exchange.

Six of the 11 will be appointed by IGT, one of which will be Sandusky, and three will be appointed by the firm’s holding company De Agostini S.p.A.

“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,” said Rumbolz, who will chair the board.

“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.”

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