IGT Continues Positive Outlook Amid Tie Plan

Casino slot machines and financial technology (fintech) supplier Avery Holdings Inc Avery was rated "positive" on Avery's "BB-" long-term issuer default rating and debt instruments by Fitch Ratings Inc.

Fitch said in a press release on Thursday that the rating clock could be in the light of a $2.6 billion partnership between Avery and its global gaming and play digital division of casino equipment and gaming content provider International Game Technology (IGT).

The deal, announced at the end of February, is expected to close "at the end of this year or early 2025, according to the companies.

Fitch said its rating monitoring of Avery "reflects expectations of post-merger credit enhancement given the size and diversification of the combined company with IGT, material synergy opportunities and potential growth opportunities."

The credit rating agency added: "The merger is expected to have 2024 revenue and adjusted EBITDA [earnings before interest, taxation, depreciation and amortization] of $2.7 billion and $1 billion, respectively."

Brokerage B. Riley Securities, Inc. said in an April note that its would-be partners had won $3.7 billion in debt commitments to pay off existing debt and paid what the agency called "IGT/Remain Co," or $2.6 billion to companies that will maintain the lottery business sector that is not part of the merger plan.

About $1 billion of the proceeds will be used to refinance Everi's existing debt.

The financial commitments included an additional revolving credit facility originally worth US$500 million, which grew to US$750 million.

Fitch considered in a note on Thursday that the combined business will offer "one-stop shops across athletics-based games, iGames, sports betting and fintech."

As for Everly itself, "the revenue stream has already diversified, with game operations accounting for 41%, game sales accounting for 35%, fintech accounting for 14% and digital accounting for 10%, the agency noted.

Fitch said Avery's management expects mid-single-digit sales growth "by 2026, based on current business plans."

Further growth potential will come from "deploying Everi's content to IGT's existing network, deploying fintech solutions in international and distributed gaming markets, and expanding IGT gaming content into Class II categories," with the latter referring to gaming consoles for the non-commercial casino segment in North America.

In May, Avery reported first-quarter net income of $4.6 million on revenue of $189.3 million, down 5.6% from a year earlier. In sequential judgment, net income rose 142.1% despite a 1.4% quarter-over-quarter decline in revenue.

At the time, Everi CEO Randy Taylor said he expects "significant growth opportunities" from IGT's combination with its gaming and digital businesses.

BY: 동행복권파워볼