GTECH to merge with Las Vegas gaming company in $6.4B deal
PBN FILE PHOTO
GTECH S.p.A. - the Italian parent company of GTECH Americas, whose Providence headquarters is pictured above - has announced a merger agreement with International Game Technology Inc. in Las Vegas. Under the terms of the agreement, the two companies will combine under a newly formed U.K.-based holding company.
PROVIDENCE – GTECH S.p.A. has agreed to purchase International Game Technology Inc., a gaming entertainment company headquartered in Las Vegas, for approximately $4.7 billion in cash and stock, merging the two companies under a newly formed U.K. holding company.
Under the terms of the agreement, announced Wednesday, GTECH will assume $1.75 billion in existing IGT debt, bringing the transaction’s total value to $6.4 billion. IGT shareholders will receive a combination of $13.69 in cash in addition to $18.25 worth of shares in the new holding company for each share of IGT common stock.
Existing IGT and GTECH shareholders will own approximately 20 percent and 80 percent of the new company, respectively, GTECH said. An official name for the new company has not yet been announced, according to a GTECH spokeswoman.
The merger, expected to close in the first or second quarter of 2015 subject to shareholder approval, joins IGT’s game library and manufacturing capabilities with GTECH’s gaming operations, lottery technology and services to form “the world’s leading end-to-end gaming company,” GTECH said.
“This transaction is transformational for our business,” said GTECH S.p.A. CEO Marco Sala, who will also serve as CEO of the new holding company. “With limited overlap in products and customers, the combined company will enjoy leading positions across all segments of the gaming landscape. It will increase our global scale and with a full suite of offerings and robust customer relationships across the client spectrum, the new company will have unparalleled capabilities to address the ongoing convergence across global gaming segments.”
Following the merger of GTECH and IGT under the new U.K. holding company, the combined entity will maintain operating headquarters in Providence, Las Vegas and Rome, where GTECH S.p.A. is currently based. GTECH Americas, which is headquartered in Providence, employs more than 1,000 people in Rhode Island.
The new company would have more than $6 billion in revenue and more than $2 billion in earnings before interest, taxes, depreciation and amortization, assuming a currency exchange rate of $1.36 per euro, according to GTECH.
GTECH will end trading of its shares on the Italian Stock Exchange after the merger, and the new company will be solely listed on the New York Stock Exchange.
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