International Game global gaming, PlayDigital businesses to combine with Everi

International Game (IGT) and Everi Holdings (EVRI) announced their entry into definitive agreements pursuant to which IGT will separate its global gaming and PlayDigital businesses by way of a taxable spin-off to IGT shareholders and then immediately combine such businesses with Everi to create a comprehensive and diverse global gaming and fintech enterprise. Under the terms of the agreements, at closing, IGT shareholders are expected to own approximately 54% and Everi stockholders are expected to own approximately 46% of the shares in the combined company. The transaction has been approved unanimously by all voting members of the IGT board of directors and Everi board of directors. The deal values the combined businesses at approximately $6.2B on an enterprise value basis. The transaction will be executed through a series of steps pursuant to which IGT will spin off a subsidiary owning its global gaming and PlayDigital businesses to IGT shareholders. That entity will then combine with Everi, with IGT shareholders receiving shares of Everi common stock and Everi continuing as the parent company. IGT shareholders will receive approximately 103.4M Everi shares, resulting in an approximate 54% ownership interest in the combined company with existing Everi stockholders owning the balance. After closing, Everi will change its name to International Game Technology and will trade on the NYSE under the ticker IGT. In connection with the transaction, IGT will receive approximately $2.6B in cash that will be funded with the proceeds of debt incurred by the combined company. IGT expects to allocate approximately $2B to IGT debt repayment with the remaining amount allocated to separation and divestiture expenses, tax leakage and general corporate purposes. The transaction implies an enterprise value for IGT’s global gaming and PlayDigital businesses of approximately $4B, and an enterprise value for Everi of approximately $2.2B. Financing commitments of $3.7B, plus a $500M revolver, are being provided by Deutsche Bank and Macquarie Capital to the combined company. Approximately $1B of the proceeds will be used to refinance Everi’s existing debt, approximately $2.6B of the proceeds will be distributed to IGT, and the remainder will be used to pay the combined company’s financing fees. The transaction has been approved unanimously by all voting members of the IGT board of directors and Everi board of directors. The transaction is subject to receipt of regulatory approvals, the approval by Everi stockholders and IGT shareholders, and satisfaction of other customary closing conditions, and is expected to close in late 2024 or early 2025. De Agostini S.p.A., which controls approximately 60% of the voting power of IGT shares, has entered into a Voting and Support Agreement in connection with the transaction. The spin-off of IGT’s Global Gaming and PlayDigital businesses is expected to be taxable to IGT shareholders for U.S. federal income tax purposes.