Everi/International Game plans $4.22 billion of debt financing

By Sara Rosenberg

New York, Feb. 29 – Everi Holdings Inc./International Game Technology Inc. (Ignite Rotate LLC) has received a commitment for $3.22 billion of senior secured credit facilities and a $1 billion senior secured bridge loan to help fund the merger of Everi with International Game Technology plc’s Global Gaming and PlayDigital businesses, according to an 8-K filed with the Securities and Exchange Commission on Thursday.

Deutsche Bank and Macquarie Capital (USA) Inc. are the joint lead arrangers and bookrunners on the debt. Deutsche Bank is the administrative agent.

The credit facilities consist of a $500 million five-year revolver and a $2.72 billion seven-year term loan.

The bridge loan is expected to be replaced with the issuance of senior secured notes or other high-yield debt securities.

Under the agreement, International Game Technology plc (IGT) will separate its Global Gaming and PlayDigital businesses by way of a taxable spinoff to IGT shareholders and then immediately combine such businesses with Everi to create a gaming and fintech enterprise.

IGT shareholders are expected to own about 54% and Everi stockholders are expected to own around 46% of the shares in the combined company.

The deal values the combined businesses at roughly $6.2 billion on an enterprise value basis.

In connection with the transaction, IGT will receive about $2.6 billion in cash. IGT expects to allocate around $2 billion of that cash to debt repayment with the remaining amount allocated to separation and divestiture expenses, tax leakage and general corporate purposes.

Proceeds from the new debt financing will be used to fund the cash payment to IGT, about $1 billion will be used to refinance Everi’s existing debt and the remainder will be used to pay the combined company’s financing fees.

Projected pro forma 2024 revenue for the merged company is about $2.7 billion, projected pro forma 2024 adjusted EBITDA is around $1 billion, and the company is expected to generate over $800 million of annual adjusted cash flow in the second year following the closing, including realized synergies.

Also, the merged company is projected to have pro forma net debt to 2024 adjusted EBITDA of 3.2x to3.4x, including run-rate cost synergies, with a path to rapid deleveraging.

After closing, Everi will change its name to International Game Technology Inc.

Closing is expected in late 2024 or early 2025, subject to regulatory approvals, the approval by Everi stockholders and IGT shareholders, and other customary conditions.

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