Apollo Management, which operates The Venetian on the Strip, will combine and take the two manufacturers private.
IGT and Everi Holdings are being acquired by an affiliate of Apollo Global Management for $6.3 billion, the companies announced Friday.
New York City-based Apollo, which operates The Venetian on the Strip, will take the new entity private once the deal closes, which is expected in the third quarter of 2025.
IGT and Las Vegas-based Everi on Feb. 29 announced plans to merge in a $6.2 billion deal that had been expected to close late this year or early next year. IGT’s headquarters is relocating to Las Vegas in that deal.
Apollo already has been vetted by Nevada gaming regulators for its acquisition of The Venetian, which usually signals a shorter path to licensing.
Under the terms of the new agreements, Everi stockholders will receive $14.25 per share in cash, representing a 56 percent premium over Everi’s Thursday closing share price. IGT will receive $4.05 billion of gross cash proceeds for IGT Gaming. IGT expects significant portions of the cash proceeds to be used to repay debt and to be returned to shareholders.
Spin-off still in play
The original IGT-Everi plan to spin off IGT’s global lottery operation from its gaming equipment and digital operations would remain intact with the Apollo deal.
IGT CEO Vince Sadusky said the new deal with Apollo would enable the company to continue to invest in its gaming operation, which is firmly entrenched in Nevada.
“Our new agreement represents a positive evolution of our previously announced transaction with Everi and a successful culmination of the strategic review process that IGT launched last year,” Sadusky said in a statement. “With the Apollo Funds, we have found a partner that recognizes the strength of IGT Gaming, the value of our talent and our position in the industry. This transaction will allow IGT Gaming to continue to invest in and enhance its growing core segments while providing customers with a more comprehensive portfolio of offerings.”
Sadusky said after the closing, IGT shareholders would continue to own 100 percent of IGT’s global lottery business, “which will be positioned for long-term success as a pure-play global lottery player with a more focused, compelling business model and optimized capital structure to drive long-term shareholder value.”
Everi President and CEO Randy Taylor said he believes the new deal maintains the strategic rationale of the original deal, but adds value for Everi shareholders.
“By joining forces with IGT Gaming, we expect to continue to lead, innovate and provide unparalleled value to our customers as a stronger player in the global gaming, FinTech, and digital industry. Apollo is a respected investment firm with a strong track record in the gaming sector, and they recognize the value of our business and see significant potential in bringing IGT Gaming and Everi together. Under private ownership, we believe we will be better positioned to accelerate the integration of our two organizations for the benefit of our customers and employees.”
Apollo closed its $6.4 billion transaction to acquire The Venetian, Palazzo and Venetian Expo Center in February 2022, 11 months after first announcing the deal with Las Vegas Sands Corp. and landlord Vici Properties.
“We are excited to reach this agreement with IGT and Everi, which establishes a leading, diversified solutions provider that is well positioned across the entire gaming ecosystem,” Daniel Cohen, an Apollo partner, said in a release.
“As an active investor in the gaming and leisure sector for many years, we have long admired both companies and their highly talented teams,” he said. “We strongly believe in the value proposition of the combination and are confident these complementary gaming platforms will be even better positioned under private ownership to capture the opportunities ahead to grow and create value. We look forward to working in partnership with all the people at IGT Gaming and Everi to propel the combined enterprise forward.”
‘Summer switcheroo’
Gaming industry analyst Barry Jonas of Atlanta-based Truist Securities, who referred to Apollo’s move as a “summer switcheroo,” told investors in a report Friday that the asset management company had been identified as a possible suitor for IGT.
“Apollo, who has gaming tech experience with AGS, was originally mentioned by media reports last year to be interested in an IGT transaction during IGT‘s strategic review process,” Jonas wrote. “It would appear improving capital market conditions and their view on an IGT gaming-Everi combination has driven them to re-engage. It will be interesting to see if Apollo maintains the current strategic direction previously articulated for the IGT Gaming-Everi combination, or looks to add or divest anything via (merger and acquisition). Ironically, yesterday Apollo acquired a separate United Kingdom parcel delivery company also called Evri, which served to confuse some U.S. gaming investors.”
The Review-Journal is owned by the Adelson family, including Dr. Miriam Adelson, majority shareholder of Las Vegas Sands Corp., and Las Vegas Sands President and COO Patrick Dumont.
