Italian lottery operator GTECH S.p.A announced Wednesday that it would acquire Las Vegas-based slot machine maker International Game Technology for $6.4 billion, including $1.75 billion in net debt. Two Am Law 100 and two Magic Circle firms were in on the deal.
Details of the acquisition can be found here. GTECH said it had secured financing from Credit Suisse, Barclays and Citigroup.
The transaction must be approved by shareholders of both companies. However, an Italian holding firm that controls nearly 60 percent of GTECH’s shares, De Agostini S.p.A., has agreed to support the transaction. It will hold 47 percent of the new company’s shares. The deal, which is also pending clearances from antitrust and gaming regulators, is expected to close in the first half of 2015.
According to an investor presentation released Wednesday, the newly combined company expects to become the world’s largest lottery business and gaming equipment company, while maintaining a strong presence in interactive wagering and social gaming.
“This transaction is transformational for our business,” Marco Sala, GTECH’s CEO, said in a statement. “With limited overlap in products and customers, the combined company will enjoy leading positions across all segments of the gaming landscape.”
It is possible that the deal is also being pursued for tax purposes, as it marks the latest in a string of corporate inversions this year as more companies are opting to abandon their U.S. residency. While neither company touted any tax benefits associated with the deal, the U.K. has been a popular country for companies seeking to enjoy a lower tax rate and to have access to foreign earnings without paying U.S. taxes.
John Vandemore, IGT’s chief financial officer, told on Wednesday that the company’s effective tax rate would slightly improve, but that the deal was not being primarily pursued for this reason.
International Game Technology sought legal counsel from Sidley Austin and Allen & Overy. The deal team from Sidley Austin included Chicago corporate partners Thomas Cole, Paul Choi and Gary Gerstman.
Sidley Austin has represented IGT in several deals, including its of Swedish online poker operator Entraction for $115 million, and its $500 million of online social gaming company Double Down Interactive. Those deals were announced in 2011 and 2012, respectively.
Allen & Overy advised IGT on US tax aspects of the deal, as well as Italian and English law. The deal team was led by New York-based tax partner Dave Lewis, and included corporate partners Paolo Ghiglione and Philipp Wahl and tax partners Francesco Bonichi and Lydia Challen. Ghiglione and Bonichi were based in Italy, while Wahl and Challen advised the deal from London.
Paul Gracey is IGT’s general counsel. According to his LinkedIn profile, he has served as in-house counsel at Nicor Inc. and Edison Mission Energy, and was an associate at Allen, Matkins, Leck, Gamble, Mallory & Natsis.
One of IGT’s board members, Robert Miller, used to be a partner at Jones Vargas, a large Nevada firm that was absorbed into Fennemore Craig in 2012.
For its part, GTECH turned to Wachtell, Lipton, Rosen & Katz, Clifford Chance and Lombardi, Molinari Segni for advice. The Wachtell team was led by corporate partners Benjamin Roth and Andrew Brownstein, and included antitrust partner Nelson Fitts, executive compensation and benefits partner David Kahan, restructuring and finance partners Joshua Feltman and Eric Rosof and tax partner Jodi Schwartz. Associates Nathaniel Asker, Valentina Cassata, Rohit Nafday, Raaj Narayan, Michael Sabbah, Francis Stapleton and Peter Zuckerman were also on the deal team.
The legal team from Clifford Chance included M&A partners Sarah Jones and Patrick Sarch and deal financing partners Charles Adams, Gary Brooks, Stewart Dunlop, Filippo Emanuele, Tom Schulte and counsel Daniel Winick.
Italian firm Lombardi Molinari Segni’s team included partners Lidia Caldarola, Giovanna Giansante, Stefano Pomicino and name partner Antonio Segni. All partners practice in private equity M&A and corporate law.
Michael Prescott is the general counsel for GTECH.
Morgan Stanley & Co. provided financial advice to IGT, while GTECH turned to Credit Suisse.
Gibson Dunn represented Morgan Stanley & Co. in its capacity as financial adviser to IGT. The deal team included Los Angeles partner Jonathan Layne and counsel Andrew Hirsch.