IGT

IGT gaming units catch the interest of Apollo

Industry analysts are closely monitoring developments at IGT Plc, given that private equity giant Apollo Global is rumored to be considering a bid for its gaming assets.

As Bloomberg reports, Apollo is evaluating its next foray into the gambling sector, where the $500bn fund might proceed to purchase IGT’s land-based and online gaming units outright.

Apollo’s bid is expected to fall in the range of $4bn to $5bn, which would encompass the takeover of IGT’s gaming business, including its associated debt.

In Q2, IGT’s board initiated a strategic review of the business. Following this, IGT confirmed to its investors that it would “evaluate strategic alternatives”, which may involve the sale of its Global Gaming and PlayDigital units.

Since 2020, IGT’s governance has been dedicated to decreasing the company’s long-term debt, which presently stands at $5.3bn. This has been accomplished by restructuring the business to emphasize profit-effective gambling verticals and by enhancing the firm’s share price performance.

As a step towards debt reduction in 2020, IGT offloaded its Lottomatica business to the Apollo-backed Gamenet Italia for $1bn.

Following the merger of Lottomatica and Gamenet, which created the largest retail gambling business in Italy, Apollo launched a revamped Lottomatica on the Borsa Milan Exchange in April, valued at €2.5bn.

IGT’s recent Q2 trading results revealed that its gaming unit posted revenues of $373m, marking a 13% YoY increase. In contrast, the digital unit registered a 38% surge in revenues, totaling $59m.

Collectively, both units reported an adjusted EBITDA of $134m for Q2 and $263m for H1. Carrying a combined EBITDA of +$500m, Apollo’s reported bid would carry a X10 valuation on earnings as reported by Bloomberg. 

SBC News IGT gaming units catch the interest of Apollo

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