Dec 09, 2020 Newsdesk Latest News, Top of the deck, World  
The decision of casino game supplier and lottery services firm International Game Technology Plc to sell off a consumer-facing Italian gaming business for EUR950 million (US$1.15 billion), would help in “accelerating debt reduction efforts” for the group, says a Tuesday memo from Union Gaming Securities LLC.
IGT’s net debt position stood at US$7.24 billion at the end of the third quarter, down from US$7.29 billion in the previous quarter, and from US$7.38 billion as of December 31, 2019.
The sell off to Gamenet Group SpA of IGT business-to-consumer (B2C) gaming machine, sports betting, and digital gaming businesses in Italy – involving units Lottomatica Videolot Rete SpA and Lottomatica Scommesse Srl – is not due to be completed until the first half of 2021.
EUR725 million is payable at closing of the deal; EUR100 million on December 31, 2021; and the remaining EUR125 million payable on September 30, 2022.
IGT said in a Tuesday press release: “IGT will use net proceeds from the transaction primarily to reduce debt.”
Union Gaming analyst John DeCree wrote: “First and foremost, exiting the Italy B2C gaming business signals an active effort to cure valuation” of its shares and underlying enterprise. “After this transaction, lottery will comprise an estimated 75 percent of segment level EBITDA [earnings before interest, taxation, depreciation and amortisation] for IGT, which will be further highlighted by the new reporting scheme that breaks out lottery and gaming EBITDA,” added Mr DeCree.
In a press release filed in the United States, Marco Sala, chief executive of IGT, was cited as saying: “The transaction enables IGT to monetise its leadership positions in the Italian B2C gaming machine, sports betting, and digital spaces at an attractive multiple to comparable Italian transactions, providing us with enhanced financial flexibility.”
According to the release, the buyer, Gamenet, is a subsidiary of funds managed by an affiliate of Apollo Global Management, Inc.
Union Gaming estimates that sequentially to December 31 this year – prior to the Italian transaction closing – IGT’s net debt will be down to under US$7.06 billion.
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