IGT For Sale as Growth Slows

In Malcolm Gladwell's book The Tipping Point, he describes an unexpected juncture at which something begins to take on energy and movement of its own - far in excess of that which was originally intended. IGT's management has blinked, possibly fearing a negative 'tipping point.'

IGT For Sale

International Game Technology is one of the largest slot manufacturers, but the potential growth of the business has not been realised. As a result of disappointing results and performance, the company has turned to buyout specialist advisors Morgan Stanley to determine the company's best way forward. Rumours have circulated for several months that the company was looking for a buyer, believing that consolidation would help fight declining revenues.

Strong Competition

IGT bought company Double Down casino from Williams Interactive in January 2012, as part of an attempted expansion into social media gaming - however, the net result has not been as productive as the management would have wished. IGT has some big hitting clients, such as; Stations Casinos, MGM Resorts International, and the Bellagio Resort and Casino - but strong competition from its rivals has seen its revenue streams increasingly squeezed.

Who Will Buy?

A possible touted buyer for IGT is gaming industry giant, Novomatic. With a 2013 turnover of more than €3.5billion and with affiliated companies in 45 countries it would certainly have the immediate liquidity with which to make a serious offer. One of the benefits of the purchase is that it would enable Novmatic to gain a stronger foothold in the Australian and US markets.

One of the results of all the sales talk is that the share price rose 14.4% to $14.31, giving the company a market value of around $3.5billion.