Apollo Signs $1.15 Billion Deal to Acquire IGT’s B2C Lottomatica Businesses

IGT announced on December 6 it will sell its B2C Lottomatica businesses to Apollo Global Management’s investment subsidiary for $1.15 billion.

IGT Board Unanimously Approves Billion-Dollar Deal

Multinational gaming provider International Game Technology (IGT) announced yesterday it has agreed to sell its Italian B2C Lottomatica businesses to Apollo Global Management’s finance subsidiary Gamenet Group for $1.15 billion.

The deal covers all of IGT’s Italian gaming machine, online and retail gaming, and sports betting ventures, which includes Lottomatica Videolot Rete and Lottomatica Scommesse. Upon the closing of the final agreement, Gamenet will pay $879.5 million of the total sale price, with $121.3 million due at the end of 2021. The funds subsidiary will have until September 30, 2022, to pay the remaining $151.6 million.

The gaming leader’s board of directors unanimously approved the deal, pending regulatory approval. IGT has announced that it will reduce its debts through the funds generated from the transaction, which should close in the first half of next year.

“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,”

Marco Sala, IGT CEO

Apollo’s Fast-Growing Portfolio

Apollo’s portfolio has been further expanded thanks to this second acquisition of gambling business, after investing $604 million into Czech-based lottery company Sazka Group, and showing interest in the buyout of Great Canadian Gaming Corporation for $2.52 billion last month.

In November, the alternative asset manager seemed inclined to compete with casino giant Caesars Entertainment’s $3.7 billion bid for the purchase of William Hill but abstained from participating later that month.

According to Regulus Partners analyst Paul Leyland, the Lottomatica deal will also benefit IGT’s strategy, as the company “gets to dispose of a business which does not obviously fit with its lottery/B2B core or its US aspirations at a historical multiple of FCF that looks sensible verging on attractive given heavy retail exposure to an already economically fragile country rocked by Covid-19 and facing ongoing fiscal-regulatory tightening.”

The deal and recent reorganization of IGT’s business will “[improve] the company’s future profit margin, cash flow generation and debt profile,” Mr. Sala declared.

Lottomatica generated €20.2 million in gross online and retail gambling revenues in Italy for October.