Apollo Global Management, a hedge fund, has made a significant move in the gaming industry by acquiring gaming equipment providers International Game Technology (IGT) and Everi Holdings in a deal worth over $6.3 billion. This acquisition marks one of the largest mergers in the slot machine industry in the past decade.
The deal, announced in an early morning statement, involves Apollo forming a new holding company to acquire IGT’s slot machine and digital gaming operations for $4.05 billion in cash. Additionally, Apollo will purchase Everi’s outstanding stock for $14.25 per share, a 56 percent premium over Everi’s closing price on the New York Stock Exchange.
The transaction is expected to take more than a year to close, according to the companies involved. The move comes after a previously announced merger agreement was canceled in favor of this new all-cash deal.
Apollo expressed confidence in the value of combining IGT and Everi, believing that the two companies’ gaming platforms will thrive under private ownership. The hedge fund has been eyeing IGT’s operations for some time and sees potential in the acquisition, including ownership of the popular Wheel of Fortune slot machine brand and IGT’s digital business, which includes a sports betting platform.
The news of the acquisition surprised the investment community, leading to a significant increase in the stock prices of both Everi and IGT. Everi saw its shares rise over 41 percent, while IGT’s shares jumped 15 percent in early trading following the announcement.
The new businesses resulting from the acquisition will likely be headquartered in Las Vegas, under the IGT name. This move consolidates the operations of the two companies in a cleaner structure, eliminating potential tax implications that were present in the previously planned merger agreement.
This acquisition is not the first major move Apollo has made in the gaming industry. In 2022, the hedge fund acquired the operations of The Venetian, Palazzo, and Venetian Expo from Las Vegas Sands Corp for $6.25 billion. Apollo’s interest in the gaming industry seems to be driven by improving capital market conditions and the potential for growth and value creation in the sector.
Overall, the acquisition of IGT and Everi by Apollo Global Management represents a significant development in the gaming equipment industry. The deal is expected to reshape the landscape of the slot machine market and create new opportunities for growth and innovation under private ownership.
