The private equity company Apollo Global has acquired the gaming division of International Game Technology (IGT), as well as Everi, for a combined value of $6.3bn. This deal replaces previous plans to merge both companies.
Apollo will spin-off IGT’s gambling business, merge with Everi Casino Technology and Payment Specialist Supplier Everi to form a combined company.
Everi shareholders receive $14.25 in cash per share, which is a premium of 56% over the closing price for Everi shares on July 25, while IGT receives $4.05bn cash. The transaction is valued at around $6.3bn.
What is IGT Everi?
This deal is the result of a merger between two companies that were already operating. IGT announced in February that it would merge its Global Gaming, PlayDigital and Everi businesses to form a global “comprehensive” and “diverse” enterprise.
Everi’s Board of Directors and an IGT special board committee have unanimously approved the transaction. The previous agreement between IGT & Everi has been terminated.
The previous agreement called for the IGT brand to be used on the New York Stock Exchange. The legacy IGT business, which is not part of this transaction, will still be listed under a different brand. De Agostini SpA will hold a small minority share in IGT-Everi.
Daniel Cohen, an Apollo partner, said that the company would “be even better-positioned to seize the future opportunities to create and grow value” under private ownership.
Cohen stated that the combination created “a leading and diversified solution provider, well-positioned in all aspects of gaming.” As an investor who has been active in the gaming industry for years, I have always admired these companies and their talented staff.
Change in leadership plans
In the original agreement, Vince Sadusky, current IGT Chief Executive Officer was also appointed as head of this new entity. These plans have now changed.
Sadusky now oversees the division of gaming operations, and will support the transition until the closing. Then he stays on to run the lottery.
Mike Rumbolz was to remain as Everi’s Executive Chairman and chair the new entity. The Apollo announcement makes no mention of Mike Rumbolz.
Two key people will remain in the IGT/Everi organization, but it is not clear who they are. Fabio Celadon, IGT’s executive vice president of strategy and business development will become chief financial officer. Mark Labay, Everi’s CFO, is named chief integration. Las Vegas will host the new company.
The IGT-Everi merger has undergone a “positive development”
According to Sadusky, the new agreement is “a positive development” from the previous transaction.
The Apollo Funds is a great partner who understands IGT Gaming’s strength, our value in the market, and the talent we possess. The transaction allows IGT Gaming the opportunity to enhance and invest in its core business segments, while offering customers a broader portfolio.
The updated deal, according to Everi President and CEO Randy Taylor maintains integrity and rationale from the original but offers “significant and sure value” for investors.
Apollo is an established investment company with strong experience in the gaming industry. They understand the importance of IGT Gaming’s business, and are excited about the potential that can be achieved by bringing IGT Gaming together with Everi.
We believe that under private ownership we can accelerate our integration for our employees and customers.
IGT, as scheduled, will release its results for the first half of this year and host an investor conference call 30 July. Everi will announce its results on 9 August but there won’t be a call.
IGT shares in New York rose 16.67% to $23.50 before the market opened, while Everi’s stock jumped 40.15% at $12.81.
