IGT Finalizes Major Sale of Italian Payment Business
Global gaming giant International Game Technology (IGT) announced the sale of its Italian-based payment platform, a transaction valued at around $788 million (€700 million). This move underscores the company's ongoing strategy to streamline its portfolio and strengthen its financial position. The IGT payment platform sale has received approval from the company's board and is expected to close in the second half of the year, though the buyer has not yet been publicly identified.
The deal involves the divestiture of LIS Holding S.p.A., the subsidiary responsible for IGT's proximity payment services in Italy. These services enable consumers to pay for various items, including utility bills, prepaid cards, and vouchers, positioning the unit as a key player in the region's fintech sector.
Vince Sadusky, the CEO of IGT, highlighted that the sale aligns with the company's long-term goals. He noted that it allows IGT to capitalize on its market leadership in Italy while refocusing on its primary business segments.
A Pattern of Divesting Italian Assets
This is not the first time IGT has sold significant assets in Italy. Just two years ago, the company sold its Italian gaming machine and sports betting operations to a fund managed by private equity firm Apollo Global Management for approximately $1.15 billion. This pattern indicates a clear strategic pivot away from certain business lines within the Italian market to concentrate resources elsewhere.
Financial Impact and Debt Reduction Strategy
The decision to sell is backed by strong financial performance. In 2021, IGT's proximity payments business in Italy generated over $250 million in sales, resulting in approximately $45 million in earnings before interest and taxes. The sale price reflects a valuation consistent with these robust figures.
A primary driver for this sale is IGT's debt reduction plan. The proceeds will contribute to the company's savings program, aimed at improving its financial health post-pandemic. IGT has set an optimistic revenue target of $4.3 billion for the current year. Achieving this could lead to further share buybacks, enhancing shareholder value.
Future Focus on Core Gaming and Sports Betting
By divesting non-core assets like the proximity payments Italy business, IGT is better positioned to invest in high-growth areas. The company previously announced plans to create a dedicated unit for sports betting, a move experts believe will unlock significant value for investors and further aid in reducing corporate debt. IGT, with its headquarters in Rome, continues to be a major force in developing backend platforms for lotteries and betting sites, as well as manufacturing iconic casino equipment like slot machines.
