DEFA14A: Everi Holdings Addresses Stockholder Lawsuits with Supplemental Proxy Statement

Everi Holdings issues a supplement to its proxy statement to address stockholder lawsuits and provide additional disclosures related to the proposed transaction with International Game Technology PLC (IGT).

Summary

• Everi Holdings has released a supplement to its proxy statement concerning the proposed transaction with IGT.
• This supplement addresses complaints from stockholders alleging omissions or misstatements in the original proxy statement.
• To avoid potential delays and expenses, Everi is voluntarily providing additional disclosures, while denying any legal necessity or materiality of these disclosures.
• The board of directors continues to unanimously recommend that stockholders vote in favor of the proposals at the Special Meeting on November 14, 2024.
• The supplement includes updates to the Background of the Merger, Opinion of Houlihan Lokey, Certain Financial Projections, and other sections of the proxy statement.
• Financial projections for 2024-2028 are provided, including revenue, cost of goods sold, gross profit, adjusted EBITDA, EBIT, net operating profit after taxes, depreciation & amortization, capital expenditures, and unlevered free cash flow.
• The company reiterates that forward-looking statements are subject to risks and uncertainties that could cause actual results to vary materially.

Sentiment

Score: 6

Explanation: The sentiment is neutral to slightly positive. While the company is facing stockholder lawsuits, it is taking proactive steps to address concerns and the financial projections indicate expected growth. However, the lawsuits and the need for a supplemental proxy statement introduce some uncertainty.

Positives

• Everi is proactively addressing stockholder concerns to ensure the proposed transaction proceeds smoothly.
• The company's board of directors continues to unanimously recommend voting in favor of the proposals.
• Financial projections show consistent growth in revenue and adjusted EBITDA over the next five years.

Negatives

• Stockholder lawsuits alleging omissions and misstatements in the original proxy statement could indicate underlying concerns about the transaction.
• The need for a supplemental proxy statement suggests potential weaknesses in the initial disclosures.
• The company is incurring expenses to defend against the lawsuits and provide additional disclosures.

Risks

• Potential future claims or litigation in connection with the Proposed Transaction could impact the timing and ability of the parties to consummate the Proposed Transaction.
• Expenses associated with the Proposed Transaction could be higher than anticipated.
• Actual financial results could vary materially from the forward-looking statements due to various risks and uncertainties.

Future Outlook

The company provides financial projections for the years 2024-2028, indicating expected growth in revenue, adjusted EBITDA, and unlevered free cash flow. However, these projections are subject to risks and uncertainties.

Management Comments

• The Companys board of directors continues to recommend unanimously that you vote FOR the proposals being considered at the Special Meeting.
• The Company believes that the alleged omissions and misstatements are immaterial and that no further disclosure is required by applicable statute, rule, regulation, or law beyond that already contained in the Proxy Statement.

Industry Context

The proposed transaction with IGT reflects ongoing consolidation trends in the gaming and financial technology industries. Companies are seeking to expand their product offerings and market reach through strategic acquisitions and mergers.

Comparison to Industry Standards

• It is difficult to compare Everi's projections directly to industry standards without knowing the specific assumptions and methodologies used.
• However, the projected growth rates for revenue and adjusted EBITDA appear to be in line with expectations for companies in the gaming and fintech sectors.
• Comparable companies in the gaming industry include Scientific Games and Aristocrat Leisure, while fintech comparables could include Global Payments and Fiserv.
• A thorough analysis would require comparing Everi's financial metrics to those of its peers, considering factors such as market share, product portfolio, and geographic presence.

Legal Proceedings

• Three purported stockholders of Everi filed complaints alleging that the Proxy Statement omitted or misstated material information with respect to the Proposed Transaction and seeking corrective disclosures and other equitable and legal relief.
• Eleven other purported stockholders of Everi have sent demand letters to the Company making allegations and demands similar to those in the Complaints.

Stakeholder Impact

• Shareholders are impacted by the potential transaction with IGT and the associated legal proceedings.
• Employees may be affected by the integration of Everi and IGT, depending on the terms of the transaction.
• Customers could see changes in the products and services offered by the combined company.
• Suppliers and creditors may be impacted by the financial performance and strategic direction of the combined entity.

Next Steps

• Stockholders are advised to read the supplemental disclosures in conjunction with the original proxy statement.
• Stockholders should vote on the proposals at the Special Meeting on November 14, 2024.
• The company will continue to defend against the stockholder lawsuits.

Key Dates

Keywords

Everi Holdings, Proxy Statement, IGT, Merger, Stockholder Lawsuits, Financial Projections, Special Meeting, Transaction