Our math suggests IGT should trade at a little over $17 given the high probability of closing and low probability of a competing bid



"CEO's Dream Strategic Transaction" and joining forces with "a tough competitor" - Patti Hart

IGT and it's management team catches a golden parachute while positioning the NewCo for a broader, deeper global platform






• Creates world leading end-to-end gaming company across all segments

‒ #1 global gaming equipment supplier
‒ #1 global lottery business
‒ Top tier in social gaming and interactive wagering

• Enhanced global scale with diversified product portfolio and geographic mix
• Greater resources allow further strengthening of industry-leading R&D effort
• Uniquely positioned to exploit key market trends
• Industry leader with more than $6B in revenues and $2B in EBITDA


Transaction Details:

• $13.69 in cash plus 0.1819x GTECH shares, equivalent to $18.25 per IGT common share (75% cash and 25% stock)

• NewCo will incorporate in the UK and UK tax resident 

• NewCo will be NYSE listed, 80% owned by GTECH & 20% IGT 

• Synergies: $280 million expected over 3 years


New Segments:

• Lottery Operations

• iGaming

• Video Lotteries

• Content

• Casinos

• Social


Pro Forma Revenue Mix (based on 2013):

• 51% Gaming Equipment'

• 35% Lotteries

• 8% Interactive

• 6% Other


Geographic Revenue Mix:

• 46% US and Canada

• 36% Italy

• 18% International




  • Process & Roadblocks:  goal was to create strategic value for shareholders, no other transaction more strategic!  No anti-trust issues. "CEO's Dream Strategic Transaction"
  • Cost savings of $280 million are incremental to previously announced cost savings transactions
  • Break-up fee: not disclosed today, but standard break up fee.
  • Discussion timeline: talks moved from partnering to tying the know, positive relationship....was a full process and evaluated all possibilities and outcomes, this is the highest value creation for IGT shareholders.
  • Participation business: no significant shift from historical, but opportunity to bring size, scale, and geographic diversity.
  • Industry needed consolidation to remove excess costs.
  • Believe industry can be stronger and IGT (NewCo) can be stronger with fewer suppliers.
  • EGM not expect unusual rescission elections.
  • Regulatory concerns: looking at 9-12 months, shooting for front-end, earlier - need to license in a few additional jurisdictions, go thru anti-trust, two Board and shareholder meetings.
  • UK domicile: GTECH had requirement to be in the EU, also believe UK is a "fantastic" market to facilitate US-listing, English speaking, slight tax advantages.
  • UK tax advantage: 100-300 bps advantage, but not the driving decision rather strategic advantages drove decision
  • Game Ops - industry needs to innovate; size and scale will afford this innovation advancement
  • GTECH licensing: a small number, no jurisdiction would appear to pose a risk to the transaction
  • Additional industry consolidation required?  No such thing as a pure gaming, slot machine supplier anymore.  More of a "distributed gaming" world.
  • Merger rationale: Reduce vulnerability and add strengths

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