Gary Green Gaming has confirmed that it is convening a consortium of private equity backers to fund a purchase of IGT’s slots business.
Announcing this move via Yahoo Finance, Green has explained that he has gained the support of a host of investors including Native American Tribes as well as Chinese PE to back the potential acquisition.
Green has written to the executive team of IGT requesting a meeting to discuss the finer details of any deal and “strategic opportunities for both companies”.
“We have reached the point that our new Private Equity entity can present a Highly Confident Letter and several strategic possibilities that we believe will appeal to IGT’s shareholders and potentially win the endorsement of Deutsche Bank, Macquarie Capital, and Mediobanca – the company’s financial advisors,” Green outlined.
This development comes shortly after IGT told the markets that it is considering strategic alternatives for its PlayDigital and Global Gaming units.
After a fruitful Q1, which displayed double-digit growth across both divisions, the board of IGT told investors that it would consider all potential alternatives, including a sale, merger, or spin-off.
In a signal of its intentions to provide significant shareholder value, the global gaming tech provider has gained the services of Deutsche Bank, Macquarie Capital and Mediobanca to facilitate any deal, whilst Sidley Austin and White & Case will represent IGT from a legal perspective.
Green formerly helped IGT forge a relationship with Native Americans over 20 years ago, when he helped the company secure an agreement to supply 600 slot machines to tribal casinos in the US.
He added: “I have a long history of being tangentially part of the IGT family through several iterations of its ownership. This is a natural next evolutionary step for both of us.”
As aforementioned, IGT’s Global Gaming and PlayDigital units provided a significant boost to its top and bottom line performance in Q1, owing to strong annual growth.
Whilst the group’s Global Lottery revenues declined 7% year-over-year in constant currency, the Global Gaming division’s revenue increased by 19% YoY, reaching $381m.
Meanwhile, the PlayDigital unit – which encompasses the firm’s PlaySports sportsbook technology – also helped to offset lottery declines, displaying 20% annual growth, as turnover reached $55m.
The Global Gaming unit, according to senior management, performed “better than expected” during the last quarter, with the unit’s operating profit growing 33% YoY to $69m.
This success was fueled by growing demand for IGT’s products and services, as records were set for both unit shipments and selling prices. Meanwhile, strong productivity and streamlined cost structures helped boost its bottom line figure.
Seeking an opportunity to provide shareholders with strong value, IGT is considering a sale of the two fast-growing units, with Green and his backers waiting in the wings.
It is potentially the latest in a flurry of M&A activities in 2023 as markets come to life following a more cautious period.
Last month, NeoGames were subject to a $1.2bn acquisition from Aristocrat, whilst PointsBet US is at the center of a $150m bid from Fanatics.
