GTECH is buying IGT for $6.4bn.
The purchase works out at $18.25 per share and comprises of $4.7bn in cash and stock and $1.7bn in debt assumption. The companies expect to achieve $280m in synergies.
The new company will be based in London and traded on the New York Stock Exchange as GTECH and will no longer trade as IGT in New York and as Lottomatica in Italy.
The merging of the world’s largest slot and lottery companies “redefines the future of the gaming industry,” IGT CEO Patti Hart said.
“This transaction is transformational for our business,” said GTECH CEO Marco Sala. “With limited overlap in products and customers, the combined company will enjoy leading positions across all segments.”
Sala will be CEO of the new company. The combined company would have had more than $6bn in revenue and $2bn in EBITDA in the 12 months ending in March.
The new company will have its corporate headquarters in the UK and operating headquarters in Nevada and Rome. When the merger is completed, IGT shareholders will own 20 per cent of the company and GTECH shareholders 80 per cent.
De Agostini, which owns 59 per cent of GTECH, will own 47 per cent of the new company. The transaction is expected to close in the first quarter of next year.
GTECH expects to finance the acquisition with cash on hand and borrowing. It has binding commitments for financing from Credit Suisse, CitiCorp and Barclays for $10.7bn.
The new company’s 13-member board of directors will include five directors appointed by IGT from IGT’s existing board, including IGT chairman Phil Satre, who will be chairman of the new company. Patti Hart will serve on the board.
GTECH will appoint seven members, at least of four of whom will be independent and one of whom will serve as a vice-chairman.
Source: Fantini's Gaming Report
