A group of Italian lottery company executives, operating under the name Gtech Holdings (formerly Lottomatica), acquired International Game Technology (IGT), a gambling industry heavyweight established in Nevada in 1990 by the renowned Si Redd a decade ago. It was somewhat discouraging that foreign investors located halfway around the globe were acquiring a company that had propelled Nevada to prominence as an industry leader in video poker and slot machines.
Last week, though, the Italian group decided to spin off a portion of the company, merge it with Las Vegas-based Everi Holdings Inc., another major gaming equipment manufacturer, and base the new company back in Nevada! Vince Sadusky, IGT’s current CEO, will retain his role, and Michael D. Rumbolz of Everi will be chairman of the new company’s board of directors. The Italian group, which had relocated IGT’s corporate headquarters to London, will keep its lottery business.
The newly merged firm will be named as IGT, trade on the New York Stock Exchange under the ticker code IGT, and have its management headquarters in Las Vegas, with its principal manufacturing facility in Reno, where it all began. Josh Swissman, founding partner and managing director of Las Vegas-based GMA Consulting, stated that when the Italian corporation acquired IGT, it effectively became a slot, casino, and lottery company all at once. He believes it makes sense to reorganize those business units to allow for greater concentration on the individual components of the firm.
A gaming industry analyst, Brendan Bussmann expressed enthusiasm regarding IGT’s return to Las Vegas. In addition, he speculated that this is likely one of numerous prospective M&A endeavors pertaining to the supplier sector in the coming years. Nevada will benefit, he said, because the new company will hire a greater number of qualified individuals.
The anticipated closing date for the transaction is early 2025, owing to the extensive global presence of IGT, which operates in over 100 countries and provides slot machines and gaming systems to commercial and tribal casinos throughout the nation. The agreement must also receive the approval of gaming regulators and shareholders of both corporations on a global scale.
Analyst David Katz of the New York-based Jefferies Group stated that although the new entity appears to be a solid long-term investment, caution is advised due to the lengthy road map to get there. As a result, the shares have been downgraded from Buy to Hold, with a price target of $13.
In addition to opportunities to optimize capital expenditures, the merger is projected to yield cost savings of approximately $85 million.
