Stock Spin-off Investing Podcast

Stock Spin-off Investing

In this podcast, Rich Howe discusses all things related to stock spin-offs.

  1. 02/04/2025

    7. Peter Smith on International Gaming Technology (IGT)

    In this episode, I talk with Peter Smith of Palm Harbour Capital. Peter shares his background and then dives deeply into InternationalGaming Technologies (ITG). In a nutshell, IGT is interesting because it has agreed to sell its Gaming & Digital business to Apollo. IGT will receive ~$3.6BN of net proceeds, when the transaction closes and the Remaining Lottery business is trading at 5x EBITDA on a pro forma basis (peers trade in the high single digit range). What’s the catch? ITG has a large Italian lottery contract up for renewal in Q2 2025 which investors are worried about. 1:45 – Peter shares his background and how a Texas native ended up in London 3:30 – Palm Harbour overview 4:30 – Peter’s experience backpacking around Europe 4:50 – How Peter landed his first job in Germany 6:45 – How Peter thinks about portfolio construction 8:45 – Why Peter thinks ex-US markets are less competitive 10:30 – Peter’s approach to spin-offs 12:00 - Peter provides an overview of International Game Technology (IGT) 13:45 – Apollo is buying the slot machine side of the business 15:45 – History of IGT’s lottery business 16:00 – Economic resilience of the lottery business 20:00 – Why IGT launched a strategic review 21:30 – Why the market did not like the initial spin-off proposal 23:30 – Overview of Italian lottery renewal 27:30 – Why is the market concerned about the Italian lottery renewal? 35:45 – Why is IGT likely to win the Italian renewal? 40:35 – How important is this contract for IGT? 44:35 – How do you think about IGT’s valuation in a scenario where it loses the Italian contract? 46:45 – What odds is the market implying that IGT is going to lose this contract? 48:10 – How much of Apollo’s $4.05BN bid will be lost to expenses and taxes? 50:20 – How do you view IGT’s management team? 52:05 – Would the RemainCo ever get sold? 54:10 – What is timing of Italian renewal and the Apollo transaction closing? 1:00 – Where you can go to learn more about Peter Smith and Palm Harbour Capital

    1h 2m

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In this podcast, Rich Howe discusses all things related to stock spin-offs.