GGRAsia – IGT mulls separate listing of digital and betting biz

IGT mulls separate listing of digital and betting biz

Nov 17, 2021 Newsdesk Industry Talk, Latest News, Top of the deck

Casino equipment maker and online gaming content supplier International Game Technology Plc (IGT) says that a separate public listing of the group’s digital and betting business is “under evaluation”, as part of a strategic review for future growth.

In supporting documents published on Tuesday during an investor day event, IGT said it expected to complete within 12 months, the “realigning” of its digital and betting segment into a new legal entity. Such a move would support “evaluation of a potential separate public listing of the business,” it stated.

In September, IGT said it was creating a dedicated digital and betting business segment, made up of its iGaming and sports betting activities: previously part of the global gaming segment. The IGT business now operates as three segments, with the new digital and betting arm running alongside its global lottery and global gaming divisions. The company’s iLottery business remains part of the global lottery segment.

As a part of the strategic review for the digital and betting segment, IGT plans to create a dedicated management team for that part of the business. Earlier this month, the company appointed Gil Rotem as president of iGaming.

In the presentation deck, the company said a separate listing of the digital and betting business would “further enhance its strategic flexibility,” while IGT would still maintain a “controlling interest following the consummation of any such potential separate public listing.”

On Tuesday, the company also announced a US$300-million multi-year share buyback programme, with the aim to “enhance shareholder returns,” after recently reinstating its quarterly cash dividend. The programme, running for a period of four years commencing on November 18, 2021, is expected to be funded through cash generated from operations.

IGT said that it expected to generate revenue in the range of US$4.1 billion to US$4.3 billion in 2022, while capital expenditures would be between US$400 million and US$450 million.

The gaming supplier also said it expected to deliver strong cash flow generation with cumulative cash from operations of approximately US$4.0 billion and free cash flow of about US$2.4 billion from 2022 to 2025. The firm also plans to reduce its leverage to a range of 2.5 times to 3.5 times in the period to 2025.

The document quoted Marco Sala, chief executive of IGT, as saying: “Over the next four years, we are confident we can deliver accelerating organic growth, significant margin expansion, and robust free cash flow to drive stakeholder value and increased shareholder returns.”