LONDON and LAS VEGAS - In a significant move within the gaming and fintech industry, International Game Technology PLC (NYSE: NYSE:IGT) and Everi Holdings Inc. (NYSE: NYSE:EVRI) have announced a definitive agreement for a business combination. The deal, approved by both companies' boards, will result in the merger of IGT's Global Gaming and PlayDigital businesses with Everi to create a diversified enterprise with a broad reach across various gaming sectors.
IGT will spin off its Global Gaming and PlayDigital businesses, which will then merge with Everi. The transaction values the combined entity at approximately $6.2 billion. Upon completion, IGT shareholders will own around 54% of the new company, with Everi stockholders holding about 46%. The merger is expected to close in late 2024 or early 2025.
The combined company will boast a comprehensive portfolio of products and services, including land-based gaming, iGaming, sports betting, and fintech solutions. It is expected to generate substantial revenue and Adjusted EBITDA, with projections for 2024 at approximately $2.7 billion and $1 billion respectively. The merger anticipates significant synergies, with an estimated $85 million in cost savings and capital expenditure efficiencies.
Vince Sadusky, the current CEO of IGT, is set to lead the new entity, while Everi Executive Chairman Michael Rumbolz will become the chairman of the board. The combined company will be headquartered in Las Vegas and will operate under the name International Game Technology, Inc., trading on the NYSE with the ticker IGT.
The transaction will also result in a pure-play global lottery business for IGT, which will retain its focus on this sector. Financing for the deal includes commitments of $3.7 billion and a $500 million revolver provided by Deutsche Bank and Macquarie Capital.
The merger is subject to regulatory approvals, Everi stockholder and IGT shareholder approval, and other customary closing conditions. De Agostini S.p.A., controlling about 60% of IGT's voting power, has agreed to support the transaction.
The information for this article is based on a press release statement.
InvestingPro Insights
In the wake of the announced merger between International Game Technology PLC (IGT) and Everi Holdings Inc., investors are closely scrutinizing IGT's financial metrics to gauge the potential impact on their portfolios. According to InvestingPro data, IGT boasts a market capitalization of $5.15 billion and presents a relatively high P/E ratio, currently standing at 51.54. This suggests that IGT is trading at a high earnings multiple, which is an important consideration for investors looking for value opportunities.
Despite the high P/E ratio, the company has managed to maintain dividend payments for an impressive nine consecutive years, which can be appealing for income-focused investors. The current dividend yield stands at 3.11%, with the last dividend ex-date recorded on November 28, 2023. Additionally, analysts predict that IGT will continue to be profitable this year, building on the profitability it has shown over the last twelve months.
Investors should also note that the company's stock price movements have been quite volatile, with a 6-month price total return of -19.09%, indicating potential risks for short-term traders. However, with an InvestingPro fair value estimation of $31.66, higher than the previous close price of $25.66, there could be room for growth in the stock's value.
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