Apollo Purchases IGT's Gaming and Digital Businesses in a USD 6 Billion Deal

Funds administered by affiliates of the private equity company Apollo Global Management Inc. will concurrently buy Everi Holdings Inc. and the gaming and digital operations of International Game Technology Plc (IGT). The three firms released a joint update on Friday, stating that the all-cash deal values the acquired businesses at about US$6.3 billion on a combined basis.

Cash payments of US$14.25 per share will be made to Everi's owners, which is a 56-percent premium over the closing share price on Thursday, July 25.

The release states that IGT would get gross cash proceeds of US$4.05 billion. It is anticipated that "significant portions" of the cash earnings would be utilized "to repay debt and to be returned to shareholders," according to IGT.

IGT and Everi announced their agreement in late February, wherein IGT will split its gaming and digital businesses and immediately combine them with Everi through a taxable spin-off to IGT shareholders. The notice said that the contract has now been canceled.

The new agreements state that the Apollo-linked firms will buy Everi and IGT Gaming, which includes the gaming and digital components. The statement stated that "IGT Gaming and Everi will be privately owned companies that are part of one combined enterprise following closing."

The deal is anticipated to close by the end of the third quarter of 2025, pending approval from Everi investors and regulatory authorities. The announcement further stated that "IGT shareholder approval is not required for the transaction."

IGT's main shareholder, De Agostini SpA, "has committed to make a minority equity investment in the combined enterprise at the closing of the transaction," according to the release.

Following the sale of its gaming and digital assets, IGT will become a "pure-play lottery company" with a new ticker symbol and name.

Vince Sadusky, the CEO of IGT, will supervise the division of IGT's gaming and digital operations and provide ongoing support during the transition.

According to the release, "Mr. Sadusky will continue in his role, leading the lottery-focused company, post-closing."

After the mergers, Mark Labay, the current CFO of Everi, will become the chief integration officer of the merged company, while Fabio Celadon, the current executive vice president for strategy and corporate development at IGT, will serve as CFO.

The headquarters of the recently merged company will be in Las Vegas, Nevada, in the United States.

"Simpler organization"

In a letter published on Friday, brokerage B. Riley Securities Inc. noted that IGT stockholders will receive "56-percent more cash" than they did under the terms of the previous IGT and Everi merger.

Since there would be no longer be any unanticipated tax consequences from the previously scheduled Everi share transfer to IGT shareholders, we think the current deal has a considerably cleaner structure.

Analyst David Bain of B.Riley Securities stated, "We believe the new transaction is a much cleaner structure, eliminating unknown tax implications from a previously planned Everi share distribution to IGT shareholders, which has been the subject of pushback from investors."

"IGT is a better-capitalized lottery pure-play post-transaction," Mr. Bain stated, adding that Everi "benefits from the transaction change."

"It is obvious that the new transaction removes merger execution risk for [Everi's] shareholders and rewards holders with a 56-percent premium to yesterday's closing price," he continued.

"We believe Apollo is well-suited – and capitalized – to assist in the combination of IGT and Everi and support the combined company's strategic initiatives," Mr. Bain continued. "Apollo is well-known by both investors and the gaming industry."

"Our new agreement represents a positive evolution of our previously announced transaction with Everi and a successful culmination of the strategic review process that IGT launched last year," IGT's Mr. Sadusky was cited as saying in the release on Friday.

"This transaction will allow IGT Gaming to continue investing in and enhancing its growing core segments while offering a more comprehensive portfolio of offerings to customers," he continued.

The new deal "maintains the integrity and strong strategic rationale" of the first agreement with IGT, according to Randy Taylor, president and CEO of Everi, "but now also provides significant and certain value to our stockholders as we move forward with the Apollo funds as our partner."

For the benefit of our clients and staff, Taylor continued, "We feel we will be better positioned to accelerate the integration of our two organizations under private ownership."

Apollo has a history of making investments in the gaming and entertainment industries, among other leisure-related areas.

According to the update, the acquisition would create "a leading, diversified solutions provider that is well positioned across the entire gaming ecosystem," according to Apollo partner Daniel Cohen.

Cohen continued, "We are convinced that these complimentary gaming platforms will be even better positioned under private ownership to capture the opportunities ahead to grow and create value. We strongly believe in the value proposition of the combination."