IGT stock soars as Global Gaming and PlayDigital segments could be sold
“Over the last three years, IGT has sharpened its strategic focus by reorganising around core product verticals, monetising non-core assets, reducing structural costs and significantly improving its credit profile,” said IGT executive chair Marco Sala (pictured left).
“We believe the intrinsic value of IGT’s market-leading businesses and diversified cash flow profile is not currently reflected in our stock price and the timing is right to assess opportunities that may enhance value for IGT’s shareholders,” he explained.
IGT’s revenue in the first quarter of 2023 reached $1.06bn, showing a modest growth of 1% compared to the same period in 2022.
However, revenue from the Global Gaming segment increased by 17% to $381m, while PlayDigital revenue experienced a similar growth of 17% to $55m.
IGT CEO Vince Sadusky commented: “IGT is a global leader with deep expertise in lottery, land-based gaming, iGaming and sports betting.“Regardless of the outcome of this process, IGT is well-positioned to deliver on its long-term growth and profit targets.”
IGT anticipates its 2023 revenue to fall within the range of $4.1bn to $4.3bn.
Additionally, the company aims to sustain a robust operating income margin between 21% and 23%.
To assist with the exploration of strategic alternatives, IGT has enlisted the services of financial advisers Deutsche Bank, Macquarie Capital, and Mediobanca.
Legal counsel is being provided by Sidley Austin and White & Case.
IGT stressed that no decision has been made regarding any alternative, and there is no timeline for the review process.
Furthermore, the company does not guarantee that this exploration will result in any transaction.
Investors reacted positively to the news, which resulted in a significant increase of over 14% in IGT’s share price.