Casino equipment maker and digital gaming content provider International Game Technology Plc (IGT) has announced that its board of directors is “evaluating potential strategic alternatives” for the group’s global gaming and PlayDigital segments, “in order to unlock the full value of IGT’s portfolio”.
“IGT’s board of directors is considering a broad range of potential alternatives, including but not limited to a sale, merger or spin-off, as well as retaining and further investing in the global gaming and PlayDigital businesses,” the firm said in a Thursday press release.
Vince Sadusky, IGT’s chief executive, said in prepared remarks that the company remained “focused on the execution” of its “growth objectives and multi-year goals” outlined in November 2021, as it starts the review and evaluation of strategic alternatives for the gaming and digital segments.
In November 2021, the company had said it was considering a separate public listing of the group’s digital and betting business, as part of a strategic review for future growth.
“Regardless of the outcome of this process, IGT is well-positioned to deliver on its long-term growth and profit targets,” Mr Sadusky stated in Thursday’s announcement.
IGT has retained Deutsche Bank, Macquarie Capital, and Mediobanca as financial advisors, and Sidley Austin and White & Case are serving as legal counsel to assist the firm in exploring strategic alternatives.
In May, IGT reported a net profit attributable to shareholders of US$23 million in the three months to March 31, on revenue that rose by 0.9 percent year-on-year, to US$1.06 billion.
The group’s global gaming revenue stood at US$389 million in the first quarter this year, up 21.2 percent from a year earlier. Revenue in the digital and betting segment was US$55 million, up from US$47 million a year earlier. The company also operates in the lottery and sports betting segments.
IGT said in its first-quarter results announcement that it had started the year with “significant cash flow generation and further improvement” in its credit profile. The company reduced its net debt to US$5.12 billion as of March 31, compared to US$5.15 billion at the end of December.
“No decision has been made regarding any alternative, there is no timeline for the review and there can be no assurance that the exploration of strategic alternatives will result in any transaction,” said the gaming supplier on Thursday.
The latest announcement also quoted the firm’s executive chair, Marco Sala, as saying: “Over the last three years, IGT has sharpened its strategic focus by reorganising around core product verticals, monetising non-core assets, reducing structural costs and significantly improving its credit profile.”
He added: “We believe the intrinsic value of IGT’s market-leading businesses and diversified cash flow profile is not currently reflected in our stock price and the timing is right to assess opportunities that may enhance value for IGT’s shareholders.”
IGT’s stock price stood at US$31.50 at the close of trading on Thursday, up 3.9 percent.
In comparison, the stock price of casino equipment and game technology provider Light & Wonder Inc was US$66.97 at the end of Thursday’s session.
Light & Wonder has restructured its business, now focusing on the land-based casino segment; the social casino business; and the iGaming segment. The company sold last year its sports betting business, involving total gross proceeds of approximately US$800 million. It also sold its lottery business, generating approximately US$5.0 billion of net after-tax cash proceeds.
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