8-K: Apollo Funds to Acquire IGT Gaming and Everi in $6.3 Billion All-Cash Deal

Apollo Funds will acquire IGT's Gaming & Digital business and Everi in an all-cash transaction, valuing the combined businesses at approximately $6.3 billion.

Summary

• IGT's Gaming & Digital business and Everi will be acquired by Apollo Funds in an all-cash transaction.
• The deal values the combined businesses at approximately $6.3 billion.
• Everi stockholders will receive $14.25 per share in cash, a 56% premium over the closing price on July 25, 2024.
• IGT will receive $4.05 billion in gross cash proceeds for its Gaming & Digital business.
• De Agostini S.p.A., IGT's majority shareholder, will make a minority equity investment in the combined enterprise.
• The transaction is expected to close by the end of the third quarter of 2025.
• Following the acquisition, IGT will become a pure-play lottery business and change its name and stock ticker symbol.
• Everi's common stock will be delisted from the New York Stock Exchange after the merger.

Sentiment

Score: 8

Explanation: The document is very positive, highlighting the benefits for all parties involved, including a significant premium for Everi stockholders and a substantial cash infusion for IGT. The strategic rationale for the combination is also emphasized.

Positives

• Everi stockholders will receive a significant premium for their shares.
• IGT will receive a substantial cash infusion, which it plans to use to repay debt and return to shareholders.
• The combined enterprise is expected to be a stronger player in the global gaming, FinTech, and digital industry.
• The combined enterprise will be better positioned to accelerate integration for the benefit of customers and employees.

Negatives

• Everi's common stock will be delisted from the New York Stock Exchange.
• The transaction is not expected to close until the end of the third quarter of 2025.

Risks

• The transaction is subject to customary closing conditions, including regulatory approvals and approval by Everi stockholders.
• There is a risk that the conditions to the consummation of the Proposed Transaction will not be satisfied in the anticipated timeframe or at all.
• There is a risk that the anticipated benefits of the Proposed Transaction may not be realized.
• There is a risk of negative effects of the announcement or failure to consummate the Proposed Transaction on the market price of IGTs ordinary shares and Everis common stock and on IGTs and Everis operating results.
• There is a risk of significant transaction costs, fees, expenses and charges.
• There is a risk of operating costs, customer loss, and business disruption.
• There is a risk of failure to consummate or delay in consummating the Proposed Transaction for any reason.
• There is a risk of litigation matters relating to the Proposed Transaction.

Future Outlook

IGT will become a pure-play lottery business, and the combined enterprise of IGT Gaming and Everi will be better positioned for growth under private ownership.

Management Comments

• IGT CEO Vince Sadusky stated that the agreement represents a positive evolution of the previous transaction with Everi and a successful culmination of the strategic review process.
• Everi President and CEO Randy Taylor believes the transaction provides significant and certain value to stockholders and will allow the company to continue to lead and innovate.
• Apollo Partner Daniel Cohen expressed excitement about the agreement and the potential of the combined enterprise.

Industry Context

This announcement reflects a trend of consolidation in the gaming industry, with private equity firms seeking to acquire established players and combine their strengths.

Comparison to Industry Standards

• The 56% premium offered to Everi stockholders is significantly higher than typical acquisition premiums in the gaming industry, suggesting a strong desire by Apollo to secure the deal.
• The all-cash nature of the transaction is also notable, as it provides certainty to Everi stockholders.
• The separation of IGT's lottery and gaming businesses is a strategic move that aligns with industry trends of specialization and focus.
• The involvement of De Agostini as a minority investor in the combined enterprise indicates a long-term commitment to the gaming sector.

Management Changes

Stakeholder Impact

• Everi stockholders will receive a significant premium for their shares.
• IGT shareholders will own a pure-play lottery business.
• Employees of IGT Gaming and Everi will be part of a larger, combined enterprise.
• Customers of IGT Gaming and Everi are expected to benefit from a more comprehensive portfolio of offerings.

Next Steps

• Everi stockholders will vote on the proposed transaction.
• Regulatory approvals will be sought.
• IGT will separate its Gaming & Digital business.
• The combined enterprise will be formed and begin operations under private ownership.

Key Dates

Keywords

acquisition, gaming, digital, lottery, FinTech, Apollo Funds, IGT, Everi, merger, cash transaction