In a strategic move, the Board of Directors of International Game Technology PLC (IGT) has greenlit a significant transaction set to reshape its business landscape. This pivotal deal involves the sale of its Italian proximity payment business subsidiaries, LIS Holding S.p.A. and LISPAY S.p.A. While awaiting regulatory approvals, the transaction, valued at €700 million, is poised to materialize in the third quarter of 2022.
Transaction Details:
Under the terms of the agreement, IGT will divest its entire holdings in LIS Holding S.p.A. and LISPAY S.p.A. The transaction’s total price tag of €700 million comprises an enterprise value of €630 million, bolstered by approximately €70 million in net unrestricted cash. Highlighting fiscal prudence, IGT plans to funnel the net proceeds primarily towards debt reduction, fortifying its financial standing.
Financial Performance:
In illuminating the rationale behind the transaction, it’s crucial to contextualize the financial performance of the divested business. In 2021 alone, the proximity payment arm of IGT churned out an impressive €228 million in gross revenue, buttressed by a robust €40 million in EBITDA. These figures underscore the solidity and viability of the segment, enhancing its appeal to potential buyers.
Strategic Advisors:
Navigating such intricate transactions necessitates adept guidance. IGT has enlisted the expertise of esteemed financial institutions and legal advisors to shepherd the process seamlessly. UBS AG assumes the mantle of lead financial advisor and provider of fairness opinions, while UniCredit S.p.A. lends its financial acumen to the group. On the legal front, Advant-Nctm spearheads advisory responsibilities, ensuring compliance and efficacy. Meanwhile, KPMG’s prowess in financial due diligence and tax advisory services bolsters IGT’s strategic maneuvering.
CEO Perspective:
Vince Sadusky, the CEO of IGT, elucidates the strategic underpinnings of the transaction. He asserts that the divestment encapsulates a deliberate effort to monetize IGT’s market leadership in the Italian proximity payment domain. By shedding non-core assets, IGT aims to streamline its portfolio, directing focus and resources towards core strategic imperatives. Such a strategic realignment, according to Sadusky, positions IGT for industry primacy while amplifying shareholder value.
The impending sale of its Italian proximity payment subsidiaries marks a pivotal juncture in IGT’s trajectory. Beyond the immediate financial windfall, the transaction symbolizes a strategic recalibration towards industry leadership and enhanced shareholder value. As the third quarter of 2022 beckons, all eyes are on IGT as it navigates this transformative journey with precision and foresight.