Tags: Slot | Machine | Maker | IGT | Sale

Reuters: Slot Machine Maker IGT Eyes Possible Sale

Monday, 09 Jun 2014 06:41 PM

International Game Technology, a Las Vegas-based slot machine maker, has hired Morgan Stanley to explore a sale as the gaming industry pursues consolidation to combat slow growth, people familiar with the matter said on Monday.

The company makes popular slot machines bearing a variety of brands such as that of television show "Wheel of Fortune," as well as the movie "Avatar." The company branched out into social gaming with the 2012 acquisition of Double Down Interactive LLC, the developer of the DoubleDown Casino on Facebook.

IGT has been working on a sale for more than two months and has attracted interest from other gaming companies and private equity firms, the people said.

News of the sale process sent the company's stock 14.4 percent higher to $14.31 on Monday, giving the company a market value of more than $3.5 billion.

According to IGTs website, customers include Stations Casinos, MGM Resorts International, and the Bellagio Resort and Casino.

IGT is hosting management presentations for prospective buyers at this time, said the people, who asked not to be named because the matter is not public. Representatives of IGT and Morgan Stanley declined to comment.

IGT decided to seek a buyer because the company's stock had lost 31 percent of its value because of slow fundamentals in the gaming market. The declining value of the company could spoil some bidders' appetite for the gaming equipment maker, some people cautioned.

The sale process could also be challenged because of regulatory approvals needed in gaming mergers. A deal could take more than a year to complete because of the need for international approvals, according to several people familiar with the matter.

A sale of IGT would follow several deals involving slot machine makers in the past year.

Last year, Bally Technologies purchased gaming equipment provider SHFL entertainment for $1.3 billion, while lottery company Scientific Games bought slot machine maker WMS Industries for $1.5 billion.

Some potential buyers could face antitrust hurdles in pursuing IGT as a result of the consolidation that has already occurred. Gaming equipment makers such as Australia's Aristocrat Leisure Limited, Japan's Sega Sammy Holdings Inc and Konami Corp, and U.S.-based Bally Technologies already have a large presence in slot machines.

Private equity firms, meanwhile, could face a financing challenge stemming from a likely lengthy regulatory review, as banks funding a leveraged buyout would not be able to indefinitely hold funds aside for a deal.

A potential private equity buyer might have to fund a deal ahead of the closing, increasing its cost of doing the deal, the people said.

According to the IGT website, the company maintains a network of 59 offices around the world including New Zealand, China, South Africa, and Argentina.

© 2017 Thomson/Reuters. All rights reserved.

   
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International Game Technology, a Las Vegas-based slot machine maker, has hired Morgan Stanley to explore a sale as the gaming industry pursues consolidation to combat slow growth, people familiar with the matter told Reuters.
Slot, Machine, Maker, IGT, Sale
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2014-41-09
Monday, 09 Jun 2014 06:41 PM
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