Intralot upgraded to ’B+’ by Fitch following Bally acquisition

Investing.com -- Fitch Ratings has upgraded Intralot S.A.’s Long-Term Issuer Default Rating to ’B+’ from ’CCC+’ following the completion of its acquisition of Bally International Interactive (BII), a subsidiary of Bally’s Corporation.

The rating agency also assigned a ’BB’ final instrument rating to Intralot Capital Luxembourg S.A.’s €300 million senior secured floating-rate and €600 million senior secured fixed rate notes, removing the previous rating watch positive.

The upgrade reflects expectations of an improved business profile and lower financial risk after the transaction, which established a more sustainable capital structure. Bally’s Corporation has become the majority owner of the combined entity.

The acquisition was financed through the new senior secured debt and proceeds from a €430 million equity issue, which were used to close the deal and repay Intralot’s existing senior secured debt.

According to Fitch, the combined company now has larger scale and higher product and geographic diversification, alongside strong operating profitability and free cash flow margins. However, the acquisition has shifted Intralot’s revenue mix to mostly business-to-consumer from its previous 90% exposure to business-to-business, potentially reducing revenue visibility.

The UK has become the combined entity’s most important market, with 73% of revenue coming from sports betting and iGaming. Fitch expects this market to expand at a stable pace, assuming no adverse regulatory changes.

The new capital structure includes €1.36 billion of senior secured debt in bonds and loans, €200 million in loans from four Greek banks, and a €160 million super senior revolving credit facility. This financing also repaid €100 million of debt due January 2026 and $230 million due July 2026.

Fitch projects the combined entity will maintain low EBITDAR leverage, gradually falling toward 3.5x by 2028 from 4.4x in 2025. The agency expects average mid-single digit annual revenue growth from 2026 to 2029, with improved profitability for the combined group.

The rating could face downward pressure if there are adverse regulatory changes, if free cash flow margins fall to low-single digits, or if EBITDAR leverage rises above 4.5x. Potential upgrades could come from continued growth, geographic expansion, and maintaining EBITDAR leverage consistently below 3.5x.

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