GTECH to Acquire International Game Technology

Global lottery provider GTECH is closing in on a full acquisition of US gaming supplier International Game Technology (IGT) on the heels of successful pricing of $5 billion in senior secure notes to complete the transaction.

Deal Breakdown

The senior secured notes for the deal are valued at $3.2 billion plus another $1.6 billion in Euros, and will be used to finance GTECH's acquisition of IGT.

In conjunction with the acquisition of IGT, another part of the deal has GTECH merging with global financiers Georgia Worldwide, a company whose shares are already listed on the New York City Stock Exchange.

Georgia Worldwide's Role

Georgia Worldwide's role in the IGT deal will be to issue the notes and utilize the proceeds from those note offerings to cover the cash component of the merger and acquisitions costs for GTECH in taking over IGT.

This is the first issuance of notes by a US company to cover a global gambling related merger, with aggregate amounts of principle due in annual percentage increments paying out each year from 2020 to 2025. The structuring is an example of innovative financial measures taken to globalize and diversify GTECH's lottery offerings, while being supplemented by a third party participating in a market where gambling is limited.

Escrow Notes Creates Hybrid-Like Deal

The use of proceeds held in escrow by participating company Georgia Worldwide in its hybrid form with IGT called NewCo represents a unique form of adding value to a gambling acquisition deal. This innovative financing approach will likely pave the way for more deals integrating overseas companies into the unregulated American economic system via the New York stock exchange, despite the fact that federal gambling laws in the Continental United States remain undefined and relatively unregulated at the national level.