Potential Acquirers May Eye IGT's Asset Sales from Europe
A few days ago, International Game Technology (IGT), traded on the NYSE, disclosed that it has been exploring options to restructure its digital content and international gaming businesses, pivoting towards its lottery division.
The company, which boasts one of the top three slot machine businesses in North America and is home to popular titles like Wheel of Fortune, has at least one potential buyer for its slot machine segment. Gaming industry pro Gary Green has assembled a private equity consortium consisting of Chinese investors and tribal casino operators to bid for IGT's wagering machines.
In a recent interview, Green stated, "We are now at the stage where our new Private Equity group can present a Highly Confident Letter and numerous strategic advantages to IGT's shareholders. We hope to garner the support of Deutsche Bank, Macquarie Capital, and Mediobanca - IGT's financial advisors." Green, who had played a key part in convincing IGT to enter the tribal casino market 20 years ago when he worked as vice president of Trump Hotels & Casinos, is driving this latest initiative.
Potential Buyers for IGT's Play Digital Unit
IGT's Play Digital division, which encompasses an internet gaming platform and a B2B sports wagering system, is projected to attract countless suitors. Market analysts speculate that this business will likely be split into two and sold off, with a higher interest from interested parties drawn to the iGaming department.
Eilers & Krejcik Gaming's (EKG) most recent EKG Line report suggests, "The online casino contingent is far more enticing in our view, boasting 17.4% of US online casino gross gaming revenue (GGR), trailing only Evolution (with its near-monopoly on live casino) and just ahead of Light & Wonder with 16.2%."
EKG predicts that Sweden-based Evolution, aiming to scale its US online casino presence, is a likely candidate to acquire IGT's internet casino business.
Moreover, the research firm opines that European suitors could be more likely to express their interest in IGT's sports wagering segment rather than domestic players such as Circa, Maverick Sports, SuperBook, Betly, and Sportsbook Rhode Island. EKG adds, "A potential buyer could emerge from Europe, where partnerships include LNB (Belgium), OPAP (Greece), and Lottomatica (Italy)."
IGT Looking to Unlock Shareholder Value
After selling its Italian digital gaming, gaming machine, and sports betting operations to Gamenet Group S.p.A for $1.15 billion towards the end of 2020, IGT relied on its lottery business to generate the bulk of its revenue.
Although the digital and gaming sections are currently expanding, they don't contribute notably to IGT's profits yet, while their growth rates are not adequately factored into the companyโs share price, prompting speculation that these parts could be spun off or sold to boost shareholder returns.
According to Macquarie analyst Chad Beynon, "The management believes the intrinsic value of its market-leading businesses, diverse cash-flow profile, and potential for growth is not fully reflected in the stock price, and the timing seems opportune to consider opportunities that might enhance value for IGT's stakeholders."
