$6.3bn gaming mega deal: Apollo Global Management to acquire International Game Technology and Everi Holdings

International Game Technology PLC (NYSE: IGT) and Everi Holdings Inc. (NYSE: EVRI) have announced a monumental deal that will see both companies acquired by a newly formed holding company, funded by affiliates of Apollo Global Management, Inc. (NYSE: APO). Valued at approximately $6.3 billion, the all-cash transaction will integrate International Game Technology’s Gaming & Digital business with Everi Holdings into a single enterprise under private ownership.

Major Acquisition Highlights

On February 29, 2024, International Game Technology PLC and Everi Holdings Inc. disclosed their agreement to proceed with a transaction involving the separation of International Game Technology’s Gaming segment. This will be achieved through a taxable spin-off to International Game Technology shareholders, who will then merge the Gaming segment with Everi Holdings. The funds managed by Apollo Global Management will acquire both International Game Technology Gaming and Everi Holdings. Post-acquisition, these businesses will operate as part of a single private entity.

Under the new agreement, Everi Holdings’ shareholders will receive $14.25 per share, marking a substantial 56% premium over the company’s closing share price as of July 25, 2024. International Game Technology PLC will receive $4.05 billion in gross cash proceeds for its Gaming segment, with the company planning to use a significant portion of this amount to reduce debt and return value to shareholders.

Strategic Moves and Future Outlook

De Agostini S.p.A., the majority shareholder in International Game Technology PLC, has pledged a minority equity investment in the newly formed entity. This investment is expected to enhance the financial strength of the combined enterprise.

Following the transaction, International Game Technology PLC will undergo a rebranding, adopting a new name and stock ticker symbol, focusing solely on its lottery business. The transaction has been unanimously approved by both the special committee of International Game Technology’s Board of Directors and the full board of Everi Holdings. The prior agreements between International Game Technology and Everi Holdings, established on February 28, 2024, have been terminated.

Expert Opinions on the Acquisition

Vince Sadusky, Chief Executive Officer of International Game Technology PLC, described the new agreement as a positive advancement from the previously announced transaction with Everi Holdings. He noted that partnering with Apollo Global Management acknowledges the value of International Game Technology’s Gaming segment and its industry standing. Sadusky emphasized that this deal will enable continued investment in core segments and offer a more comprehensive portfolio to customers. Post-transaction, International Game Technology shareholders will retain full ownership of the global lottery business, which will be well-positioned for long-term success as a focused lottery entity.

Randy Taylor, President and Chief Executive Officer of Everi Holdings Inc., supported Sadusky’s views, highlighting that the deal preserves the strategic rationale of the original agreement while delivering significant value to Everi’s shareholders. Taylor expressed confidence that the merger with International Game Technology’s Gaming segment will strengthen their position in the global gaming, FinTech, and digital sectors. He praised Apollo Global Management for recognizing the value of the combined businesses and anticipated that the new structure will accelerate integration for the benefit of all stakeholders.

Daniel Cohen, Partner at Apollo Global Management, expressed enthusiasm for the acquisition, describing it as a move to create a leading, diversified solutions provider across the gaming ecosystem. Cohen commended both International Game Technology PLC and Everi Holdings Inc. for their talented teams and complementary platforms, expressing confidence in the value of the merger and its potential for growth under private ownership.

Governance and Transaction Details

Vince Sadusky will oversee the separation of International Game Technology’s Gaming segment and manage the transition through to the completion of the transaction. Post-acquisition, Sadusky will lead the newly rebranded lottery-focused company. Fabio Celadon, current Executive Vice President of Strategy and Corporate Development at International Game Technology, will serve as Chief Financial Officer of the combined entity, while Mark Labay, Chief Financial Officer at Everi Holdings, will assume the role of Chief Integration Officer. The new combined enterprise will be headquartered in Las Vegas.

Upon closing, shares of Everi Holdings will be delisted from the New York Stock Exchange. The acquisition is subject to customary closing conditions, including regulatory approvals and approval from Everi Holdings’ shareholders, and is expected to be completed by the end of the third quarter of 2025. International Game Technology shareholders do not need to approve the transaction. Financial advisors to International Game Technology PLC include Macquarie Capital, Deutsche Bank, and Mediobanca, with legal counsel from Sidley Austin LLP, White & Case LLP, and Wachtell, Lipton, Rosen & Katz. For Everi Holdings Inc., Global Leisure Partners LLC is the exclusive financial advisor, with additional advice from Houlihan Lokey and legal counsel from Pillsbury Winthrop Shaw Pittman LLP. The Apollo Funds are advised by Paul, Weiss, Rifkind, Wharton & Garrison LLP.