The definitive agreement includes the sale of Lottomatica Videolot Rete and Lottomatica Scommesse by IGT. The total payment of €725m will be made upon closing the deal. Additional payments of €100m and €125m will be made on 31 December 2021 and 30 September 2022, respectively. These deferred payments are secured by an equity commitment letter from Apollo-managed funds. IGT intends to use the proceeds to reduce its net debt. The transaction allows IGT to monetize its leading positions in the Italian B2C gaming machine, sports betting, and digital spaces, providing the company with enhanced financial flexibility. The businesses to be sold are valued at approximately €1.1bn based on an enterprise value. In 2019, these businesses generated adjusted EBITDA of €206.6m and net income of €92.1m. The transaction is subject to closing conditions and regulatory approvals and is expected to be completed in the first half of 2021.
The transaction has been unanimously approved by IGT’s board of directors. Credit Suisse International is serving as the lead financial advisor for the deal, with UBS providing financial and fairness opinion advisory services. White & Case and NCTM are acting as general advisors. Gamenet Group is being advised by Mediobanca, Paul, Weiss, Rifkind, Wharton & Garrison, as well as the Italian offices of Cleary, Gottlieb, Steen & Hamilton and Latham & Watkins.
IGT reported a 14.9% year-on-year decline in third-quarter revenue to $981.5m in November. The global gaming division of IGT was severely impacted by the Covid-19 pandemic during the three months ending 30 September. Apollo Global has been active in acquisitions this year, including a bid for William Hill and investments in Sazka Group and the operator KKCG. It has also entered a deal to acquire Canadian casino business Great Canadian Gaming Corporation. IGT’s shares closed up 3.38% at $12.53 per share in New York on Friday (4 December), showing a 10.82% decrease in the past 12 months.
