Intralot has reached an agreement for €660 million (£776 million) in new, long-term debt financing to support its acquisition of the Bally’s International Interactive business.
The financing comprises several elements, including a €460 million six-year senior secured term loan agreement with institutional lenders. Also included is €200 million in binding financing commitments for a four-year amortising term loan from a Greek bank consortium.
All funds, Intralot said, will go towards its purchase of the Bally’s division. In July, Intralot struck a deal to acquire Bally’s International Interactive for €2.70 billion in a cash-and-stock transaction.
Closing of the new term financing is subject to certain conditions precedent related to the acquisition and refinancing. In addition, Intralot agreed with the holders that its €130 million retail bond may remain outstanding after the acquisition completes.
What next for Intralot and Bally’s?
By acquiring the Bally’s business, Intralot said this will create an iGaming and lottery leader with €1.1 billion in revenue. The reverse-style merger will also see Bally’s become Intralot’s majority shareholder.
As for Bally’s, the deal will improve its cash reserves as it seeks to fund its land-based casino developments in the US and Australia. Intralot and Bally’s expect the acquisition to complete before the end of 2025.
Should the deal proceed as expected, Bally’s chief executive Robeson Reeves will replace Nikolaos Nikolakopoulos as Intralot CEO. Nikolakopoulos will lead the lottery division, while Intralot Chairman Sokratis Kokkalis and Bally’s Chairman Soohyung Kim will remain on the board.
“This transaction marks a transformative moment for Bally’s as we unite our outstanding gaming and data technology with Intralot’s exceptional expertise in lottery,” Reeves said in July. “Together, we are creating a unique proposition that will pave the way for a new era of innovation and growth across the entire gaming spectrum.”
Intralot and Bally’s target UK growth
In the wake of the acquisition, Intralot reported its financial results for H1. These revealed a mixed performance, with revenue edging up but gross profit declining and a small net loss being posted.
Lottery remained the primary source of revenue, accounting for 53% of all revenue. Sports betting contributed 22%, video lottery terminals 12.8% and IT products and services 12.2%. B2C revenue was higher year-on-year although B2B and B2G performance was more mixed.
Shortly after the results were made public, Intralot hosted its capital markets day. Here, both Nikolakopoulos of Intralot and Reeves from Bally’s spoke, with a focus on how the combined business will work.
Early focus appears to be on the UK, in particular the customer retention of Bally’s within the market. Reeves noted that these areas of expertise would be the driving force for Intralot’s B2C iGaming, sports betting and iLottery expansion.
“We’re very UK dominant. [But] this combination [with Intralot] allows us to spread out our revenue. It’s good and bad being UK dominant, you know? You might say you’re too concentrated. [But] regulation means that you end up with a stable, reliable business,” he told analysts and investors.
Intralot will use the funds to support its acquisition of the Bally’s division.