IGT presence returning to Las Vegas through a $6.2B merger
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Nearly a decade after slot machine giant International Game Technology (IGT) merged with worldwide lottery conglomerate GTECH, the casino equipment provider will return to its roots in Nevada through a $6.2 billion transaction with Las Vegas-based Everi Holdings.
Under the terms of the deal announced Thursday morning, IGT’s slot machine division and its digital gaming operations will be spun off from the lottery business into a separate public company. The new company will combine with Everi, with the merged operations taking on the historic IGT name.
“The deal creates a one-stop show across land-based [casino] gaming, iGaming, sports betting, and [financial technologies],” Truist Securities gaming analyst Barry Jonas wrote in a research note following the announcement.
Jonas said the combination of Everi’s financial technology with IGT’s management systems “would create a more complete all-in-one offering with a strong back-end product portfolio.”
When the transaction closes either later this year or in early 2025, current IGT shareholders will own 54 percent of the new IGT with current Everi shareholders owning the balance of the company, which will be headquartered in Las Vegas and trade on the New York Stock Exchange.
The lottery business will take on a new name and trade on the New York Stock Exchange under a new symbol.
Current IGT CEO Vince Sadusky will continue in that role with the new company while Everi CEO Randy Taylor will become a member of the IGT board. IGT Executive Vice President Fabio Celadon will become the chief financial officer of the combined company and current Everi CFO Mark Labay will have a new position as chief integration officer of IGT.
Everi Chairman Mike Rumbolz will become chairman of the new IGT board.
During a Thursday conference call with analysts to discuss the merger, Sandusky said IGT looked into several potential partnerships and outright sales. He said merging with Everi provided the best alternative because it wouldn’t involve selling off pieces of the two companies.
“We are amazingly complementary in our product lines,” Sandusky said, adding that IGT doesn’t have a financial technologies business component. “Everi has good [slot machine] game titles and is desirous of expanding into international markets. We ultimately decided this was the best alternative.”
Everi develops slot machines and other gaming equipment, management systems and customer loyalty programs for casinos and online gaming. Everi’s financial services division offers casinos the technology for monetary transactions and cashless gaming.
Taylor said on the conference call that the merger with IGT would help the company bring its financial technology and cashless gaming systems into international gaming markets at a lower cost.
“It will actually allow us to get outside of the U.S. faster,” Taylor said. “Clearly for us to get global, that was going to be a big endeavor.”
IGT announced last June that it was “evaluating strategic alternatives” for the business segments. The global gaming division includes IGT’s legacy gaming equipment operations, including ownership of the “Wheel of Fortune” slot machine brand. IGT’s digital business includes its sports betting platform and its sportsbook management operations.
Back to Nevada
The transaction returns the corporate headquarters of IGT to Las Vegas. Since a $6.4 billion sale in 2015 to what was then called GTECH Holdings, IGT maintained a sales and marketing office in Las Vegas and a gaming equipment manufacturing center in Reno. The digital gaming business will also be headquartered in Las Vegas.
IGT was founded in Nevada in 1979 by the late Si Redd and went public in 1981, which led to a long growth cycle as the company became the industry’s dominant slot machine developer and provider as casinos expanded across the U.S.
Under more than two decades of leadership by the late Chuck Mathewson, the company moved its corporate headquarters to Reno and introduced gaming innovations, such as computer-driven slot machine reels and the first wide-area progressive jackpots, commonly known as “Megabucks.”
Mathewson was CEO when the company introduced “Wheel of Fortune,” the slot machine based on the popular television game show that remains a staple on casino floors worldwide more than two decades later.
The “Wheel of Fortune” brand is now utilized across IGT’s gaming, lottery and digital portfolios. The company has made more than 250 variations of the “Wheel of Fortune” slot machines and the games have paid out more than $3.3 billion in jackpots over the last 25 years.
Since 2015, the company’s corporate headquarters has been in London with secondary offices in Rome, Las Vegas and Providence, Rhode Island — the original home of GTECH.
GTECH’s buyout of IGT was one of two gaming industry mergers between the largest national and international lottery operators and the then-dominant casino industry slot machine providers. The other was when Scientific Games acquired Bally’s Technologies for $5.1 billion in 2014, which was unwound in 2022.
Everi was created from the 2014 sale of slot machine maker Multimedia Games to financial services provider Global Cash Access for $1.2 billion. At the time, Multimedia Games was considered one of the up-and-coming slot machine manufacturers. The company is headquartered in Austin, Texas, with a sales and marketing office in Las Vegas.
The name change away from Global Cash Access and new branding signified the company’s transition to providing the gaming industry with more than just payment processing equipment.
Updated at 10:44 a.m. on 2/29/2024 with additional comments.
