| LONDON, July 17
LONDON, July 17 Italian-regulated gaming company
GTECH is backing its $4.7 billion cash and stock
acquisition of U.S. based International Game Technology (IGT)
with a $10.7 billion bridge loan.
The deal is the second-biggest acquisition financing in
Europe, the Middle East and Africa this year after a $14.2
billion loan for Bayer which financed its acquisition
of US-based Merck's consumer care business.
GTECH's financing, which will also be used to refinance
existing debt, is initially being provided by Credit Suisse,
Barclays and Citigroup.
The loan will finance the $3.7 billion cash consideration of
the acquisition, $1.3 billion will be used to backstop an IGT
bond, 2.5 billion euros ($3.38 billion) will backstop a GTECH
bond and $600 million will be used to backstop drawn loans.
The fees on the bridge loan are 1.5 percent.
The bridge loan is expected to be repaid mainly by issuing
euro and dollar-denominated bonds, depending on the company's
rating post acquisition.
GTECH expects to have leverage of 4.5 to 4.9 times net debt
to Earnings Before Interest, Tax, Depreciation and Amortisation
(EBITDA) at closing. Synergies are expected to cut leverage by
around 0.5 times.
Credit Suisse is lead financial advisor to GTECH and left
lead arranger and bookrunner on the financing.
Barclays and Citigroup are also financial advisors and
acting as joint-lead arrangers, joint bookrunners and
co-syndication agents on the financing.
The acquisition is expected to close in the first half of
Under the merger, IGT and GTECH will combine under a newly
formed UK holding company which will have its corporate
headquarters in the United Kingdom and operating headquarters in
Las Vegas, Providence and Rome.
The combined entity will have more than $6 billion of
pro-forma revenues and more than $2 billion of pro-forma EBITDA.
($1 = 0.7394 Euros)
(Editing by Tessa Walsh)