LONDON and LAS VEGAS - International Game Technology PLC (NYSE: NYSE:IGT) and Everi Holdings Inc. (NYSE: NYSE:EVRI) have announced definitive agreements for the acquisition of IGT's Gaming & Digital business and Everi by a holding company owned by Apollo Global Management, Inc. (NYSE: NYSE:APO) affiliates. The all-cash transaction values the combined businesses at approximately $6.3 billion.
Everi stockholders will receive $14.25 per share in cash, a 56% premium over the closing share price on July 25, 2024. IGT is set to receive $4.05 billion of gross cash proceeds from the sale of its gaming division. A significant portion of these proceeds is expected to be used to repay IGT's debt and return value to its shareholders.
Under the new ownership structure, IGT Gaming and Everi will operate as privately held entities within a unified company. De Agostini S.p.A., IGT's majority shareholder, has committed to a minority equity investment in the new enterprise after the transaction closes. Subsequently, IGT will rebrand as a pure-play lottery business under a new name and stock ticker.
The transaction received unanimous approval from the special committee of the IGT Board of Directors and the Everi Board of Directors. The previous agreements between IGT and Everi, announced on February 29, 2024, have been terminated.
IGT CEO Vince Sadusky expressed that the new agreement is a positive evolution of the initial transaction with Everi and concludes the strategic review launched last year. Everi President and CEO Randy Taylor conveyed that the transaction with Apollo maintains the integrity of the original agreement with IGT, providing significant value to Everi stockholders.
Apollo Partner Daniel Cohen highlighted the combined enterprise's positioning across the gaming ecosystem and Apollo's commitment to fostering growth and creating value.
The transaction is subject to customary closing conditions, including regulatory approvals and approval by Everi stockholders, with completion expected by the end of the third quarter of 2025. IGT shareholder approval is not required.
IGT is scheduled to release its second quarter 2024 results on July 30, 2024, and Everi will release its results by August 9, 2024. Due to the transaction, Everi will not host an earnings conference call.
This news is based on a press release statement.
In other recent news, Apollo Global Management has been the subject of several significant developments. Jefferies has revised Apollo's outlook upward, raising the investment firm's price target to $129.00 from $117.00, despite a slight decrease in distributable earnings per share estimates for Q2 2024. The firm's year-over-year growth projections remain positive, with estimates for 2024 suggesting a 15% year-over-year increase in fee-related earnings.
Apollo Global Management, along with Kyndryl Holdings, is considering a joint acquisition of DXC Technology (NYSE:DXC), which could value DXC Technology's shares between $22 and $25. This potential acquisition comes as DXC Technology plans to divest its insurance software business, which could fetch upwards of $2 billion.
In terms of financial movements, Apollo has priced a $750 million senior notes offering with a 5.800% interest rate, due in 2054. The net proceeds, estimated at approximately $743.4 million, will be allocated for general corporate purposes. Furthermore, Apollo has also launched another offering of senior notes, guaranteed by several of its subsidiaries.
In collaboration news, Apollo and Sony (NYSE:SONY) Pictures Entertainment are reportedly in talks to acquire and split Paramount Global for $26 billion. Apollo is also in potential $11 billion investment negotiations with Intel Corporation (NASDAQ:INTC) for a manufacturing facility in Ireland, as noted by Deutsche Bank, which maintained a Hold rating on Intel.
These are the recent developments involving Apollo Global Management.
InvestingPro Insights
In the wake of Apollo Global Management's (NYSE: APO) acquisition of IGT's Gaming & Digital business and Everi, the financial metrics and analyst insights provided by InvestingPro paint a robust picture of Apollo's market position and future prospects. With a substantial market capitalization of $69.23B, Apollo stands as a powerhouse in the Financial Services industry. The company's Price to Earnings (P/E) ratio stands at 13.61, reflecting investor confidence in its earnings capacity relative to its share price.
The strength of Apollo's financial health is further evidenced by its impressive revenue growth, boasting a 120.25% increase in the last twelve months as of Q1 2024. This is complemented by a high gross profit margin of 26.29%, indicating efficient management and a strong competitive position in its sector. Despite analysts anticipating a sales decline in the current year, Apollo's history of maintaining dividend payments for 14 consecutive years showcases its commitment to shareholder returns, a factor that could reassure investors looking for stable income streams.
InvestingPro Tips suggest that while the stock's price movements are quite volatile, Apollo has delivered a high return over the last year, with a 52.12% price total return. Additionally, the company is trading near its 52-week high, at 97.09% of the peak value, which could signal market optimism about its performance and future growth trajectory.
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