IGT sheds Italian weight offloading Lottomatica B2C units to Gamenet SPA
Italian gambling has woken up to a seismic M&A deal, as IGT Plc has agreed to sell its Lottomatica B2C gaming and sports betting units to Gamenet SPA for €950 million.
Moving to divest its Lottomatica ‘Scommesse‘ (sports betting) and ‘Videolot Rete‘ (B2C machines), IGT informs stakeholders that the technology group will refocus on its ‘Global Gaming segment on core competency as a B2B service provider’.
Updating investors, IGT governance stated that the transaction had been recommended to ‘rebalance the business’, allowing the firm to ‘improve its future profit margins and cash flow generation’.
The transaction values Lottomatica B2C units at an enterprise value of approximately €1.1 billion, with the assets, sold generating circa €207 million in aggregated adjusted EBITDA in 2019.
Furthermore, the sale sees IGT maintain its ‘corporate commitment’, as proceeds from the transaction will be primarily used to reduce the firm’s long-term debt of $7.6 billion (as disclosed in FY-2019 accounts).
Should the deal be sanctioned, the NYSE gambling group will maintain its heritage Lottomatica lottery division, as its sole B2C trading unit.
“The transaction enables IGT to monetize 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,” said Marco Sala, CEO of IGT.
“Aligning with our recent reorganization, the favourable rebalancing of our business and geographic mix reframes and simplifies our priorities while improving the Company’s future profit margin, cash flow generation, and debt profile.”
Financed by US private equity group Apollo Global, Gamenet SPA has agreed to pay an upfront cash settlement of €725 million by 31 December, with the remaining €125 million payable by 30 September 2022.
Gamenet continues its aggressive M&A expansion to dominate, Italian land-based gaming and retail sports betting. Closing 2018 Gamenet secured its position as Italian largest sportsbook network, acquiring all GoldBet retail points for €300 million.
The agreed transaction will likely receive close scrutiny from Italy’s AGCM – competitions and markets authority as Gamenet current market portfolio accounts for +2,000 betting concessions and servicing a retail betting network of +900 betting points.
Gamenet operates an active land-based gambling portfolio of 70 gaming halls and +38,000 gaming machines across Italy.
Source: SBC News
