IGT

IGT sheds corporate weight as Italian payments subsidiary sold

IGT has completed the sale of its Italian proximity payment business to PostePay S.p.A, striving to maintain focus on its corporate restructure and debt reduction. 

Finalised at €700m, the sale will see PostePay take control of the payments business from IGT’s IGT Lottery subsidiary. The price represents a negotiated sales price with an enterprise value of €630m, approximately €70m of net unrestricted cash. 

An increase in the latter was attributed largely to the ‘timing of vendor payments and operating cash flows’ since 31 December 2021. 

Plans for the sale were initially laid out in February, with IGT asserting that the €700m transaction price was backed by the payments subsidiaries 2021 closing figures of €228m in gross revenues, and EBITDA of just under €40m.

Commenting at the time, IGT CEO Vincent Sadusky, said: “This transaction provides us with an opportunity to monetize IGT’s market leadership in the Italian proximity payment business at an attractive value as we continue to execute our long-term strategy.

“Streamlining our products and solutions portfolio enables us to focus our efforts and resources on our core and strategic assets, as we position IGT for industry leadership and increased shareholder value.”

IGT explained that proceeds from the deal will be used to pay transaction expenses and continue the reduction of the company’s debt, an objective it has made progress on in recent months. 

The NYSE-listed betting, gaming and lottery solutions provider disclosed to its investors earlier this month that it had launched a tender offer to ‘purchase for cash’ $500m of its outstanding $1.1bn senior secured cash holdings for 2025.

This would be further applied to its outstanding euro debt notes of €500m due for payment in 2024, as the company strives to redeem $500m in cash from its existing euro and dollar debt tranches.

According to Sadusky – as detailed following publication of the group’s full year 2021 trading results – IGT is targeting a strategy of “grow, innovate, and optimise” in 2022, eyeing up investment in its Digital and Betting and R&D divisions.

Another target set out by the CEO was greater product diversification for its Lottery subsidiary – which has now shed some weight with the sale of its payments business.

Meanwhile, for PostePay, the acquisition has secured the company an Italian network of over 54,000 points of sale, as well as services covering bill payments, prepaid payment cards, telco and e-voucher top-ups, along with technology solutions such as merchant and enterprise services.

Further details of the transaction saw UBS AG serve as IGT’s lead financial advisor and fairness opinion provider, UniCredit as a financial advisor, Advant-Nctm as a legal advisory and KPMG as financial due diligence and tax advisor.

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