The looming acquisition of Everi Holdings Inc and IGT Gaming by Apollo Global Management will create an entity with a higher installed North American slot machine base than Light & Wonder and larger combined sales market share than either Light & Wonder or Aristocrat, according to latest analysis by Fitch Ratings.
The ratings agency outlines its expectations for the new Everi-IGT entity in a Monday note in which it maintained Everi’s Long-Term Issuer Default Rating (IDR) at “BB-” and its debt instruments on Rating Watch Positive (RWP). Fitch said the Rating Watch reflects its expectation of stronger credit post-merger due to the increased scale and diversification of the combined entity, material synergy opportunities and potential growth.
According to Fitch analysts, the new entity will present a significant force in the market, offering combined pro forma revenue in 2024 of US$2.6 billion and Adjusted EBITDA of US$1.1 billion.
Notably, the company would as of today have an installed base of around 70,000 units, surpassing Light & Wonder’s 54,397.
“Fitch estimates the combined pro forma slots sales market share in North America will exceed that of Light & Wonder and Aristocrat Leisure Ltd. The merger should enable more cross-selling opportunities between the two entities,” it said.
Fitch is also bullish on the new entity’s diversified revenue stream, noting that at current levels gaming operations account for 29%, gaming sales 23%, Systems and Software 23%, FinTech 15% and digital 10%. Further growth potential includes distribution of Everi’s content into IGT’s existing networks, distribution of FinTech solutions in international and distributed gaming markets and expansion of IGT game content into the Class II category, the agency said.
While Everi holds only a niche position in the slots market and declining ship share against the larger suppliers, Fitch sees considerable strength across its portfolio.
Likewise, “Although both Light & Wonder and Aristocrat Leisure have a stronger presence in iGaming, Everi’s FinTech segment offers a unique and compelling growth opportunity given IGT’s sales presence and existing market position,” it said.
Apollo’s acquisition of Everi and IGT Gaming is expected to take place in the third quarter.
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