International Game Technology (IGT) and Everi Holdings (EVRI) announced on Friday that IGT’s gaming and digital business (IGT Gaming) and Everi will both be acquired by a newly formed holding company owned by Apollo Global Management (APO). The all-cash deal is worth $6.3 billion. IGT is a gambling company.
Shares of IGT and Everi soared in pre-market trading following the news of the deal.
Details of the IGT-Apollo Deal
Earlier this year, IGT and Everi announced definitive agreements for IGT to spin off its Gaming business to shareholders and immediately merge it with Everi. However, this deal has now been terminated.
According to the new agreement, Apollo will acquire IGT Gaming and Everi. After the deal closes, IGT Gaming and Everi will become privately owned entities under one combined company. The transaction is expected to be completed in the third quarter of next year. Additionally, IGT will change its name and stock ticker symbol following the sale of IGT Gaming and will transition to a pure-play lottery business.
As part of the deal, Everi stockholders will receive $14.25 per share in cash, representing a 56% premium over Everi’s closing share price on July 25. Furthermore, IGT will receive $4.05 billion in cash proceeds for IGT Gaming, which will be used to repay debt and return value to shareholders.
The transaction has been unanimously approved by the boards of both companies. IGT’s CEO, Vince Sadusky, will oversee the deal and continue leading the new lottery-focused company.
Is IGT a Good Investment?
Analysts remain cautiously optimistic about IGT stock, with a Moderate Buy consensus rating based on two Buys and one Hold. Over the past year, IGT has declined by 28%, and the average IGT price target of $29.50 implies an upside potential of 29.39% from current levels. However, these ratings are likely to change over the coming weeks in light of this news.
