DEFA14A: Apollo Funds to Acquire IGT's Gaming & Digital Business and Everi in $6.3 Billion 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, with Everi stockholders receiving $14.25 per share.

Summary

• IGT's Gaming & Digital business and Everi will be acquired by Apollo Funds for $6.3 billion.
• Everi stockholders will receive $14.25 per share in cash.
• IGT will receive $4.05 billion in gross cash proceeds.
• De Agostini S.p.A. will make a minority equity investment in the combined enterprise.
• IGT will change its name and ticker symbol to focus on its lottery business.
• The transaction is expected to close by the end of the third quarter of 2025.
• Fabio Celadon from IGT will become CFO, and Mark Labay from Everi will become Chief Integration Officer of the combined enterprise.
• The combined enterprise will be headquartered in Las Vegas.

Sentiment

Score: 8

Explanation: The announcement is positive due to the significant premium for Everi stockholders and the strategic benefits for IGT. Apollo's involvement adds credibility and financial strength to the combined enterprise.

Positives

• Everi stockholders receive a 56% premium for their shares.
• IGT receives $4.05 billion in gross cash proceeds.
• IGT can focus on its lottery business with an optimized capital structure.
• The combined enterprise is expected to be a stronger player in the global gaming, FinTech, and digital industry.
• Apollo's investment provides capital and expertise to accelerate the integration of IGT Gaming and Everi.

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 are risks related to the ability to realize the anticipated benefits of the Proposed Transaction.
• There are potential negative effects of the announcement or failure to consummate the Proposed Transaction on the market price of IGT's ordinary shares and Everi's common stock and on IGT's and Everi's operating results.

Future Outlook

IGT's Global Lottery business will be positioned for long-term success as a pure-play global lottery player. The combined IGT Gaming and Everi enterprise will be better positioned to capture opportunities and grow under private ownership.

Management Comments

• Vince Sadusky (IGT): '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.'
• Randy Taylor (Everi): 'We believe this transaction maintains the integrity and strong strategic rationale of our original agreement with IGT, but now also provides significant and certain value to our stockholders as we move forward with the Apollo Funds as our partner.'

Industry Context

The gaming industry is undergoing consolidation and private equity firms are increasingly interested in acquiring gaming assets. This transaction reflects a trend towards larger, more diversified gaming companies.

Comparison to Industry Standards

• Blackstone acquired Aristocrat Leisure's gaming content and technology business for $6.25 billion in 2022.
• Apollo Global Management has a history of investing in the gaming and leisure sector, including Great Canadian Gaming Corporation and The Venetian Resort Las Vegas.
• The 56% premium offered to Everi stockholders is higher than the average premium paid in recent gaming industry acquisitions.

Management Changes

Stakeholder Impact

• Everi stockholders will receive a significant premium for their shares.
• IGT shareholders will own 100% of IGT's Global Lottery business.
• Employees of IGT Gaming and Everi will have opportunities in the combined enterprise.
• Customers will benefit from a more comprehensive portfolio of offerings.

Next Steps

• Everi will file a proxy statement with the SEC.
• Everi stockholders will vote on the proposed transaction.
• The transaction is subject to regulatory approvals.
• The transaction is expected to close by the end of the third quarter of 2025.

Key Dates

Keywords

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