International Game Technology (IGT), a global leader of entertaining and responsible gaming experiences, separates its lottery and gaming operations. Following internal audits of its Global Lottery, Global Gaming, and PlayDigital divisions, the company reportedly moves to continue its lottery operations as an independent business. At the same time, IGT Global Gaming and PlayDigital divisions will merge with a leading supplier of gaming platforms and technology solutions, Everi Holdings, into a single company worth $6.2 billion, as Reuters reports.
Separating Lottery Operations from Gaming and Betting Units:
IGT Global Lottery reportedly generates more than 50 percent of the group’s revenues. Therefore, it will continue to exclusively focus on own operations, while the two units will join forces to continue offering gaming systems, iGaming, and sports betting as a part of the new entity formed with Everi Holdings. As reported, IGT Global Gaming and PlayDigital will hold title over around 54% of shares of the new venture while Everi will hold the remaining 46%. The source reports that the value of the merger is assessed at around $6.2 billion.
Merger Looking to $2.7Billion in 2024 Revenues:
IGT and Everi expect the deal to bring extensive benefit to shareholders. The combination of a comprehensive and diverse portfolio of gaming and sports betting content, coupled with the fintech solutions, will render the new entity a significant competitive advantage. According to Reuters, the merger is projected to generate 2.7 billion in revenues still in 2024. IGT CEO Vince Sadusky will lead the combined company which will be based in Las Vegas, while IGT Global Lottery will be led by a new CEO, as reported by Reuters.
In the press release, Vince Sadusky, IGT CEO, said: “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.”
Regulatory Approvals Posing Risks to Projected Revenues:
As reported by Reuters, Truist analyst Barry Jonas commented: “The deal doesn’t assume a huge premium for either businesses but could setup over time for a gaming tech powerhouse.”
In addition, the deal is reportedly expected to save around $85 million in costs. But the revenue projected for 2024 may depend on potentially lengthy regulatory approvals. The Truist analyst refers to these as ”significant risks posed by the deal’‘, according to the source.
The merger deal is reportedly expected to close by the end of 2024 or early in 2025. Once regulatory approval have been received, the combined company will launch its operations under the name International Game Technology, according to Reuters. The same source reports that the company will be listed on the New York Stock Exchange as IGT.