IGT and Everi combine in $6.2bn gaming deal

BY Fraser Tennant

In a combination that creates a global gaming and FinTech enterprise, International Game Technology (IGT) and Everi Holdings Inc. are to merge in a deal that values the combined businesses at approximately $6.2bn.

Under the terms of the agreement, the transaction will be executed through a series of steps pursuant to which IGT will spin off a subsidiary owning its Global Gaming and PlayDigital businesses to IGT shareholders.

That entity will then combine with Everi, with IGT shareholders receiving shares of Everi common stock and Everi continuing as the parent company. IGT shareholders will receive approximately 103.4 million Everi shares, resulting in an approximate 54 percent ownership interest in the combined company, with existing Everi stockholders owning the balance.

Following the closing of the transaction, Everi will change its name to International Game Technology, Inc. and will trade on the New York Stock Exchange under the ticker IGT.

“We are bringing together two businesses with complementary strengths that are stronger and more valuable together,” said Vince Sadusky, chief executive of IGT. “The combination results in a comprehensive and diverse product offering, addressing more aspects of the gaming ecosystem across land-based gaming, iGaming, sports betting and FinTech.”

The transaction has been approved unanimously by all voting members of the IGT board of directors and the Everi board of directors. 

“We expect the combined company will deliver a comprehensive range of products and services that will engage gaming patrons and drive efficiencies and revenues to our customers,” said Michael Rumbolz, executive chairman of Everi.

Subject to receipt of regulatory approvals, the approval of Everi stockholders and IGT shareholders, and satisfaction of other customary closing conditions, the transaction is expected to close in late 2024 or early 2025.

Mr Sadusky concluded: “The creation of separate gaming and lottery companies, each with experienced management teams and simplified business models, better positions each company to service customers and create significant value for stakeholders.“

News: International Game Technology to split lottery business from gaming unit

CenterPoint to sell natural gas assets in $1.2bn deal

BY Richard Summerfield

Bernhard Capital Partners has announced it is to acquire CenterPoint Energy’s Louisiana and Mississippi natural gas assets for $1.2bn.

Under the terms of the deal, Bernhard Capital’s portfolio company Delta Utilities will acquire CenterPoint Energy’s Louisiana and Mississippi natural gas local distribution businesses which include around 12,000 miles of main pipeline in Louisiana and Mississippi serving approximately 380,000 metered customers. The assets represent less than 4 percent of CenterPoint’s overall rate base.

According to a statement announcing the deal, the sales price of $1.2bn represents approximately 32 multiples of the assets’ 2023 earnings. The transaction is anticipated to close toward the end of first quarter of 2025, subject to customary closing conditions, including antitrust clearance and state regulatory approvals.

“The transaction will allow us to optimize our portfolio of utility operations and efficiently recycle approximately $1 billion in after-tax cash proceeds into our service territory where we have both electric and natural gas operations or where we have a larger presence at a valuation that is more efficient than issuing common equity,” said Jason Wells, president and chief executive of CenterPoint. “The sale will also enable us to redeploy approximately $1 billion of future capital expenditures intended for Louisiana and Mississippi into jurisdictions with less regulatory lag thereby enhancing the ongoing earnings power of the company.

“This will mark the fourth time over the past few years in which we have recycled sales proceeds and reinvested them in our regulated businesses for the benefit of all stakeholders,” he continued. “The transaction, along with the reinvested capital, will not change our targeted non-GAAP EPS growth rate of 8% in 2024, and the mid-to-high end of 6%-8% annually from 2025 through 2030. The efficiency of this transaction and portfolio optimization will further enhance our ability to continue executing our industry-leading long-term growth strategy for years to come.”

“This transaction will bring together deep expertise and leadership with many years of experience in utility operations and the invaluable institutional knowledge of those who have operated these systems for decades to benefit customers,” said Jeff Jenkins, founder and partner at Bernhard Capital Partners. “It builds upon our recent announcement to acquire Entergy’s New Orleans and Baton Rouge natural gas distribution businesses, establishing stronger, more resilient communities across the Gulf South. Once both transactions are complete, Delta Utilities will be a leading natural gas utility in Louisiana and Mississippi and among the top 40 providers in the United States.”

News: CenterPoint to sell Louisiana and Mississippi natgas assets for $1.2 bln

Diamondback acquires Endeavor in $26bn deal

BY Fraser Tennant

In a move that will create a premier Permian independent operator, oil and natural gas company Diamondback Energy, Inc. is to acquire exploration and production firm Endeavor Energy Resources, LP in a transaction valued at approximately $26bn.

Under the terms of the definitive merger agreement, Diamondback’s existing stockholders are expected to own approximately 60.5 percent of the combined company and Endeavor’s equity holders are expected to own approximately 39.5 percent.

The combined company would be the third-largest oil and gas producer in the Permian Basin of West Texas and New Mexico, behind Exxon Mobil and Chevron. The transaction has been unanimously approved by the board of directors of Diamondback and received the necessary Endeavor approvals.

“This is a combination of two strong, established companies merging to create a ‘must own’ North American independent oil company,” said Travis Stice, chairman and chief executive of Diamondback. “The combined company’s inventory will have industry-leading depth and quality that will be converted into cash flow with the industry’s lowest cost structure, creating a differentiated value proposition for our stockholders.”

Upon closing, Diamondback’s board will expand to 13 members and the combined company will continue to be headquartered in Midland, Texas.

“As we look toward the future, we are confident joining with Diamondback is a transformational opportunity for us,” said Lance Robertson, president and chief executive of Endeavor. “Our success up to this point is attributable to the dedication and hard work of Endeavor employees, and today’s announcement is recognition by Diamondback of the significant efforts from our team over the past seven years, driving production growth, improving safety performance and building a more sustainable company.”

The merger is expected to close in the fourth quarter of 2024, subject to the satisfaction of customary closing conditions, including termination or expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, and approval of the transaction by Diamondback’s stockholders.

Mr Robertson concluded: “We look forward to working together to scale our combined business, unlock value for all of our stakeholders and ensure our new company is positioned for long-term success as we build the premier Permian-focused company.”

News: Diamondback sets $26 billion deal for shale oil rival Endeavor Energy

Gilead agrees $4.3bn CymaBay deal

BY Richard Summerfield

In a move set to bolster its liver disease portfolio, Gilead Sciences has agreed to acquire CymaBay Therapeutics for $4.3bn.

Under the terms of the deal, CymaBay shareholders will receive $32.50 per share, a 26.5 percent premium to the company’s share price on Friday. The transaction was approved by the boards of both Gilead and CymaBay and is anticipated to close during the first quarter of 2024, subject to regulatory approvals and other customary closing conditions.

The deal will give Gilead access to CymaBay’s investigational lead product candidate, seladelpar, which is used for the treatment of primary biliary cholangitis (PBC) including pruritus. This will complement Gilead’s existing liver portfolio and aligns with its commitment to bringing transformational medicines to patients.

“We are looking forward to advancing seladelpar by leveraging Gilead’s long-standing expertise in treating and curing liver diseases,” said Daniel O’Day, chairman and chief executive of Gilead Sciences. “Building on the strong research and development work by the CymaBay team to date, we have the potential to address a significant unmet need for people living with PBC and expand on our existing broad range of transformational therapies.”

“Today’s agreement with Gilead is the culmination of years of focus and determination at CymaBay to advance seladelpar and bring new hope to people living with PBC and their families,” said Sujal Shah, president and chief executive at CymaBay. “Now that seladelpar has achieved priority review with the FDA, we are excited that Gilead, with its long-standing commitment to patients with liver disease, can apply its regulatory and commercial expertise to bring seladelpar as quickly as possible to people with PBC.”

PBC is a rare, chronic, cholestatic liver disease mainly affecting women (one in 1000 women over the age of 40 or about 130,000 total people in the US) that impairs liver function and quality of life. Seladelpar is estimated to generate sales of $1.9bn by 2029, if approved, according to LSEG data. It is an investigational, oral, selective peroxisome proliferator-activated receptor delta agonist, shown to regulate critical metabolic and liver disease pathways.

CymaBay submitted a marketing application to the US Food and Drug Administration (FDA) for the drug in December. The FDA has completed its filing review, accepted a New Drug Application for seladelpar, and granted priority review with a Prescription Drug User Fee Act target action date of 14 August 2024.

News: Gilead to buy CymaBay for $4.3 bln in bets on liver disease treatment

Barratt to acquire Redrow in £2.52bn deal

BY Richard Summerfield

The UK’s biggest housebuilder, Barratt, has agreed to acquire its smaller rival Redrow in an all-stock deal worth around £2.5bn.

The merged group, to be called Barratt Redrow, is expected to build about 23,000 homes a year and have a turnover of more than £7bn. The combined market value of the two companies was £7.2bn when financial markets closed on Tuesday, the day before the deal was announced.

Barratt shareholders will retain 67.2 percent of the new group, leaving Redrow shareholders with 32.8 percent. The Redrow brand will be retained for marketing new homes and its Heritage collection, aimed at more affluent buyers, added to the portfolio, which also comprises Barratt’s more affordable David Wilson Homes. Under the terms of the deal, each Redrow shareholder will receive 1.44 new Barratt shares for each share they hold.

According to Barratt, the deal will allow for £90m in cost-saving synergies and will offer opportunities for the new group to consolidate its supply chain. Subject to regulatory and shareholder approval, the deal is expected to complete in the second quarter of this year.

“We have great respect for Redrow, its overall strategy, its leadership and employees, and its high-quality homes and communities,” said David Thomas, group chief executive of Barratt. “This is an exciting opportunity to bring together two highly complementary companies, creating an exceptional homebuilder in terms of quality, service and sustainability, able to build more of the high-quality homes this country needs. The Combined Group would leverage the respective strengths of both Barratt and Redrow, delivering significant benefits to our people, our supply chains, and - most importantly - our customers.”

“Redrow and Barratt combined creates a leading UK homebuilder,” said Matthew Pratt, group chief executive of Redrow. “Together, we’ll be in a much better position to offer a broader range of high-quality and energy efficient homes to customers. The Redrow brand, with its premium, characterful homes, has an excellent reputation and will remain a key part of the Combined Group. As with Barratt, Redrow’s fifty-year success story is based on its people, products and supply chain partners. Both businesses are a great fit and there are many exciting opportunities to innovate and share knowledge across a range of different areas.”    

“During the 50 years since I founded Redrow, I could not be more proud of the unique reputation it has earned for building premium homes and thriving communities,” said Steve Morgan, founder of Redrow. “Barratt is a home builder I have long admired due to their likeminded attention to quality. I am confident that the Barratt / Redrow combination with their three high-quality complementary brands, will create a standout home builder for the future and accelerate the delivery of much needed homes across the UK.”

News: UK homebuilder Barratt to buy Redrow in 2.52 billion pound deal