IGT Might Take New Digital Arm Public

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International Game Technology Plc (IGT), the casino equipment manufacturer and online content supplier, said that a public listing of the group’s newly-formed betting and digital businesses is under evaluation as part of a strategic review for future development.

IGT claimed that the realignment of its betting and digital segments into a new legal entity would be completed within 12 to 18 months in supporting documents. These documents were published at Tuesday’s investor day event. This move would be in support of “evaluation of a potential separate public listing of the business,” it said.

IGT Evolves Business Operations

IGT stated in September that it was creating a special digital and betting business segment. The segment will comprise its iGaming-related and sports betting activities. IGT now operates with three segments. The new betting and digital arm will be running alongside the global lottery, and its global gaming divisions. The company’s iLottery unit remains part of its global lottery segment.

IGT is creating a new management team to oversee the digital and gambling segment as part of its strategic review. Gil Rotem was elected president of iGaming earlier this month to lead the new initiatives.

The company explained that the separate listing  would “further enhance its strategic flexibility.” IGT would, however, still retain a “controlling interest following the consummation of any such potential separate public listing.”

IGT To Buy Back Shares

Tuesday saw the company announce a $300 million multi-year share-buyback program. It is designed to enhance shareholders’ returns after it recently reinstated its quarterly cash distribution. The program, which is expected to last four years, begins on November 18. Funding for it will come from cash operations.

IGT stated it is expected to generate revenues in the range of $4.1billion to $4.3billion in 2022. It also said that capital expenditures would range between $400million to $450million.

Additionally, the gaming supplier said that it expects strong cash flow generation. The company estimates that cumulative cash from operations will be approximately US$4.0billion. Free cash flow will be about $2.4billion. This is between 2022-2025. In the next five years, the firm will reduce its leverage to between 2.5 and 3.5 times.

Marco Sala, CEO of IGT, stated that the company was confident it could deliver accelerating organic development, significant margin expansion, strong free cash flow and robust stakeholder value to “drive shareholder value” and increase shareholder returns over the next four years.

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