DEFA14A: Everi Holdings to be Acquired by Apollo Funds in Conjunction with IGT Gaming & Digital Business

Everi Holdings Inc. has entered into definitive agreements to be acquired by the Apollo Funds, who will simultaneously acquire IGT's Gaming & Digital business, with the transaction expected to close by the end of the third quarter of 2025.

Summary

• Everi Holdings Inc. is set to be acquired by the Apollo Funds.
• The Apollo Funds will also acquire IGT's Gaming & Digital business.
• Following the acquisition, IGT Gaming and Everi will operate as two privately owned companies under one combined enterprise.
• The acquisition is expected to be completed by the end of the third quarter of 2025.
• Until the acquisition is finalized, both companies will continue to operate independently.
• After the acquisition, the go-forward strategy will be reassessed to align and set new financial goals.
• Employees are directed to a SharePoint site and a dedicated email inbox (merger@everi.com) for transaction-related information.
• The company emphasizes a commitment to positive work environments and a thoughtful approach to integration, with no plans to implement organizational changes before closing.
• The company is committed to the ongoing success and stability of current projects and devotion to customer relationships.
• Everi will file relevant materials with the SEC, including a proxy statement on Schedule 14A.

Sentiment

Score: 7

Explanation: The document presents a positive outlook on the acquisition, emphasizing strategic alignment and growth opportunities. However, it also acknowledges potential risks and uncertainties, resulting in a moderately positive sentiment score.

Positives

• The acquisition is expected to broaden product and service offerings.
• The acquisition is expected to provide increased operational flexibility through private ownership.
• The acquisition is expected to expand global opportunities and reach.
• The Apollo Funds' support is expected to drive long-term value through innovation and growth.
• The company emphasizes a commitment to positive work environments and a thoughtful approach to integration.
• The company is committed to the ongoing success and stability of current projects and devotion to customer relationships.

Negatives

• The document mentions potential negative effects of the announcement or failure to consummate the Proposed Transaction on the market price of the capital stock of Everi and on Everi's operating results.
• The document mentions the risk that Everi's stock price may decline significantly if the Proposed Transaction is not consummated.
• The document mentions the risk of significant transaction costs, fees, expenses and charges.
• The document mentions the risk of operating costs, customer loss, and business disruption.
• The document mentions the risk of difficulties in maintaining employee, customer, or other business, contractual, or operational relationships following the Proposed Transaction announcement or closing of the Proposed Transaction and the diversion of Everi management's attention from its ongoing business.

Risks

• The acquisition is subject to stockholder and regulatory approvals.
• Failure to obtain necessary approvals could prevent the transaction from closing.
• The company faces risks related to retaining and hiring key personnel.
• The company faces risks related to competition in the gaming industry.
• The company faces risks related to intellectual property, privacy matters, and cyber security.
• The company faces risks related to economic changes in global markets, such as currency exchange, inflation and interest rates, and recession.
• The company faces risks related to government policies (including policy changes affecting the gaming industry, taxation, trade, tariffs, immigration, customs, and border actions) and other external factors that Everi cannot control.
• The company faces risks related to regulation and litigation matters relating to the Proposed Transaction or otherwise impacting Everi or the gaming industry generally, including the nature, cost and outcome of any litigation and other legal proceedings related to the Proposed Transaction that may be instituted against the parties and others following the announcement of the Proposed Transaction.

Future Outlook

The company anticipates the acquisition will broaden product and service offerings, expand global opportunities, and drive long-term value. Post-acquisition, the company plans to reassess its strategy and set new financial goals.

Management Comments

• Today marks yet another significant milestone in Everi's journey.
• Emphasize the strategic fit and complementary strengths of combining IGT's Gaming & Digital business with Everi.
• Reassure employees that both companies will continue to operate independently until the expected acquisition is finalized, ensuring business continuity.
• Highlight the plan to reassess our go-forward strategy after the expected acquisition to align and set new financial goals.
• Encourage leaders to maintain focus on current responsibilities, foster a positive attitude, and promote adaptability and openness to change.
• Commit to transparent communication and support for all employees throughout the process.

Industry Context

The consolidation of Everi and IGT's Gaming & Digital business reflects a broader trend in the gaming industry towards larger, more diversified companies with expanded global reach. This move aims to create a stronger competitor with a wider range of products and services.

Comparison to Industry Standards

• Similar acquisitions in the gaming industry, such as Scientific Games' acquisition of Bally Technologies, have aimed to create synergies and expand market share.
• The timeline for this acquisition, expected to close by the end of the third quarter of 2025, is typical for transactions in the highly regulated gaming industry, which often require extensive regulatory approvals.
• The strategic rationale of combining complementary businesses to broaden product offerings and expand global reach aligns with industry best practices for mergers and acquisitions.

Stakeholder Impact

• Shareholders will need to vote on the proposed transaction.
• Employees are reassured of business continuity and transparent communication.
• Customers are assured of continued quality service and proactive communication.
• The acquisition is expected to broaden product and service offerings, potentially benefiting customers.
• The company commits to transparent communication and support for all employees throughout the process.

Next Steps

• Everi will file relevant materials with the SEC, including the proxy statement on Schedule 14A.
• The company will seek stockholder approval for the proposed transaction.
• The company will work to obtain necessary regulatory approvals.
• The company will continue to operate independently until the acquisition is finalized.
• Post-acquisition, the company will reassess its strategy and set new financial goals.

Key Dates

Keywords

acquisition, Everi Holdings, Apollo Funds, IGT Gaming, merger, gaming industry, SEC, proxy statement, transaction