Speaking to investors in IGT’s Tuesday morning earnings call, CEO Vince Sadusky said the Justice Department has already reviewed some aspects of the Apollo deal.
Executives with IGT, the London-based gaming equipment manufacturer with a massive presence in Nevada, believe the surprising $6.3 billion acquisition of the company by an affiliate of Apollo Global Management will be swiftly approved by regulators.
While details about how Apollo’s acquisition announced last week — which supersedes an earlier plan for IGT to merge with Las Vegas-based Everi Holdings — will affect operations in Nevada are unclear, IGT executives said Tuesday that they expect the approval of the deal by regulators will be smooth.
“Apollo is in the gaming business, so they have experience with regulators,” IGT CEO Vince Sadusky said in response to an investor’s inquiry in Tuesday morning’s second-quarter earnings conference call.
Sadusky also said IGT’s plan to merge with Everi, announced Feb. 29, had already been reviewed by the U.S. Department of Justice. That transaction was billed as a return of IGT’s headquarters to Las Vegas.
“We had our transaction, our original transaction with Everi, evaluated by the DOJ,” Sadusky said.
“So, you know, we were in good shape there,” he said. “So we think it’s logical that the focus from an antitrust perspective would be on Apollo’s business. The IGT business has already been evaluated, and they’re (Apollo) not in the equipment manufacturing business and own a casino (The Venetian and Palazzo in Las Vegas). So we’re hopeful that that will move along pretty quickly on both fronts. We’ve estimated roughly a year, just given the timing, and of course, for the agreement, it could be as far out as 15 months.”
Representatives of IGT, Everi and Apollo announced the new transaction Friday, but offered no specifics about how it will affect Nevada operations.
Local IGT officials say they have nothing to add beyond what the company said last week and from Tuesday’s earnings call.
A spokesman confirmed the lottery division of the company would remain public and take on a new name and stock ticker symbol with Sadusky at the helm.
Leadership for gaming and digital divisions would go private under Apollo and leadership has not been announced.
There is no indication whether the current workforce would be maintained or if there would be layoffs resulting from the blending of IGT and Everi.
Most analysts have maintained their investment ratings on IGT.
IGT and Everi each have manufacturing operations in Las Vegas and IGT’s core slot machine manufacturing business grew in Reno after being founded by William “Si” Redd in 1975. The company adopted the name International Game Technology in 1981, eventually shortening it to IGT.
The company is best known for its development and distribution of Wheel of Fortune-themed slot machines.
For the quarter that ended June 30, IGT reported operating income of $230 million, 20 cents a share, on revenue of $1.05 billion, with income down 8 percent and revenue off 1 percent from the same quarter a year ago.
In light of the pending transaction, the company gave no future financial guidance due to pending separation and divestiture expenses.
