Interactive gaming software and services provider GTECH has entered into a definitive agreement to acquire gaming products designer and manufacturer International Game Technology (IGT) for $4.7 billion (€3.5 billion) in cash and stock.
Under the deal, IGT and GTECH will combine under a newly formed holding company organised in the UK.
The aggregate transaction value of the agreement is around $6.4 billion, which is inclusive of the assumption of approximately $1.75 billion in existing IGT net debt.
According to the two companies, the deal will create an end-to-end gaming company that will be able to capitalise on opportunities across global gaming market segments.
The news comes after iGaming Business last month reported that the two companies had entered preliminary talks over a potential merger.
At the time, there were also various reports that other rivals bidders were planning to make formal offers alongside GTECH.
However, GTECH has now agreed a deal and expects the transaction, which has been approved by the boards of both companies, to be completed in the first or second quarter of 2015.
Marco Sala, chief executive officer of GTECH, said the transaction represents a ‘transformational’ deal for the business.
“With limited overlap in products and customers, the combined company will enjoy leading positions across all segments of the gaming landscape,” Sala said.
“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.
“Our expertise across these segments and greater ability to invest in R&D will improve player experiences and benefit our government and business clients. The transaction will significantly enhance our cash flow and financial strength, and provide clear and achievable cost and revenue synergies.”
Patti Hart, chief executive officer of IGT, was also optimistic about the deal and the potential of the new company.
Hart added: “This outstanding combination of two global leaders truly defines the future of gaming entertainment. Together we are uniquely positioned to provide the industry’s broadest and most innovative portfolio of best-in-class products, solutions and services.
“This strategic agreement positions us to further transform the industry while providing meaningful benefit and value to our customers, employees and shareholders.
“Our dedicated employees’ commitment and innovation have enabled us to capitalise upon this opportunity, and we look forward to integrating with the GTECH team to achieve even greater levels of success.”
source : www.igamingbusiness.com