IGT Agrees to iSoftbet Acquisition For $232M

International Game Technology (IGT) has agreed to acquire iSoftBet for €160 million cash ($232.5 million). IGT expects the deal to go through during the second quarter of 2022, subject to regulatory approval.

The acquisition more than doubles the IGT PlayDigital content library to almost 225 games. In addition, it gives IGT a world-class game aggregation platform it plans to use to distribute third-party games.

Vince Sadusky is the IGT CEO. He issued a brief statement to the company’s shareholders.

“The acquisition of iSoftBet will provide market-tested proprietary digital content, advanced game aggregation capabilities, scalable promotional tools, analytics, and strong creative talent to IGT’s PlayDigital operations. This will enhance PlayDigital’s competitive capabilities with a proven, complementary content portfolio across Europe and North America as we provide best-in-class games and technology to out fast-growing iGaming customers.”

iSoftBet is a great company, especially for a $232.5 million outlast. It boasts of 125 proprietary games, and more than 4,600 third-party games through its aggregation platform. The company reported €30 million ($43.6 million) and €8 million ($11.6 million) of EBIDTA during the 2021 fiscal year. iSoftbet employs approximately 350 employees and contractors across its three main offices in England, Malta, and Romania.

The Latest in a Long Lime of IGT Additions

Nobody can accuse IGT of resting on its laurels because this is the latest in a long line of acquisitions and partnerships. The company has fingers in pokies, lotteries, scratch cards and other forms of gambling.

Italian gambling company Lottomatica acquired Gtech Corporation in August 2006, later rebranding to Gtech. It began acquiring International Game Technology in July 2014, completing the deal in April 2015. Gtech paid $8.54 billion, including $6.27 in cash, for the company. They dropped the Gtech name in favour of IGT.

IGT struck a deal with Authentic Brands Group in late November 2021. The group is a marketing and entertainment company that managed the Marilyn Monroe estate. The deal allows IGT to develop and distribute Marilyn Monroe-themed scratch cards and lotteries. Both these products are extremely popular in Monroe’s native United States.

The company formed a partnership with Yggdrasil the following month. The move came after IGT unveiled a new dedicated iGaming and sports betting business. It made sense because IGT controls approximately 20% of the online pokies market globally.

Solid Financials During a Difficult Trading Period

The COVID-19 pandemic hit IGT hard, like most other gambling companies. A large percentage of its revenue stems from live pokies in brick-and-mortar casinos. Those casinos’ doors remained closed for large parts of 2020, which meant reduced revenue for IGT.

However, the company’s latest trading figures make impressive reading. Group revenue increased 31% from US3.11 billion ($4.15 billion) to US$4.09 billion ($5.46 billion). Its various lottery businesses, in particular, performed well, with a 66% revenue increase.

Although the number of IGT-owned machines fell by 451 to 48,849, the yield from those machines increased 50.1%. Each machine pays IGT US27.11 ($36.19) per day, on average, up from a COVID-hit US$18.06 ($24.11) per day.

Overall, net income tipped the scales at US$482 million ($643.5 million), a remarkable recovery from the US$898 million ($1.2 billion) loss of the previous year.

However, long-term debts in excess of US$6.5 billion ($8.67 billion) bog down IGT. The company is restructuring some of its debt, resulting in US$65 million in annual savings on interest alone. In addition, its OPtiMa 2.0 cost-reduction programme will deliver US$150 million ($200.2 million) in savings by the end of 2023.

IGT has many liquid assets and is a cash-rich entity. Reports show it has US$2.1 billion ($2.8 billion) in cash and credit revolvers. It has plans to invest US$300 million ($400.5 million) in repurchasing shares in the company, which is the first such program in the company’s long and illustrious history.