Global gaming giant International Game Technology PLC (IGT) revealed overnight that it is evaluating potential strategic alternatives for its Global Gaming and PlayDigital segments, including their potential sale or spin-off.
The company is also considering various merger options but may end up retaining both segments and investing further into them as it explores various options aimed at unlocking the “full value” of IGT’s portfolio.
“Over the last three years, IGT has sharpened its strategic focus by reorganizing around core product verticals, monetizing non-core assets, reducing structural costs and significantly improving its credit profile,” said IGT’s Executive Chair, Marco Sala. “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.”
CEO Vince Sadusky added, “IGT is a global leader with deep expertise in lottery, land-based gaming, iGaming and sports betting. We remain focused on the execution of our growth objectives and multi-year goals outlined in our November 2021 Investor Day as we undertake this review and evaluation of strategic alternatives. Regardless of the outcome of this process, IGT is well-positioned to deliver on its long-term growth and profit targets.”
IGT, which has retained Deutsche Bank, Macquarie Capital and Mediobanca as financial advisors, explained that no decision has been made on which avenue to follow, that there was no specific timeline in place and no guarantee it would complete any such transaction in relation to is its gaming and PlayDigital segments.
The announcement does, however, echo similar moves by industry competitor Light & Wonder, formerly known as Scientific Games, which in recent years has sold off its lottery and sports betting segments. It is also in the process of completing a secondary listing of shares on the Australian Securities Exchange (ASX) in addition to its original NASDAQ listing.
Light & Wonder CEO Matt Wilson said in an interview last week that those moves had helped the company deleverage over the past two years and subsequently invest further in areas such as R&D and user acquisition costs for its social casino business. He also said Light & Wonder expected to grow its Adjusted EBITDA as a result from US$913 million in 2022 to US$1.4 billion by 2025.
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