A subsidiary of International Game Technology has struck a definitive agreement to sell its Italian proximity payment business to PostePay for €700m.

The divestment, says the group’s wholly owned subsidiary IGT Lottery, represents an enterprise value of €630m and approximately €70m of net unrestricted cash.

Under the terms of the agreement, the group will be selling LIS Holding and indirectly LISPAY, two wholly owned subsidiaries that conduct IGT’s proximity payment business, which offers services through a fully owned payment technology platform and network of 54,000 points of sale. 

Services offered range from payments services including bill payments and prepaid payment cards, to commercial services providing telco and e-vouchers top up and technological solutions including merchant and enterprise services.

The business being sold generated in the region of €228m in gross revenues and approximately €40m in EBITDA through 2021, which its adds reflects “a valuation multiple in line with the most recent Italian transactions in the proximity payments sector”. 

IGT, whose board of directors have approved the transaction, which remains subject to customary closing conditions, including regulatory approvals, will use net proceeds from the transaction primarily to reduce debt. Closing of the transaction is expected to occur during the third quarter of 2022.

“This transaction provides us with an opportunity to monetise IGT’s market leadership in the Italian proximity payment business at an attractive value as we continue to execute our long-term strategy,” said Vince Sadusky, IGT CEO.

“Streamlining our products and solutions portfolio enables us to focus our efforts and resources on our core and strategic assets, as we position IGT for industry leadership and increased shareholder value.”