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American land-based and iGaming behemoth Scientific Games Corporation has announced the signing of a definitive agreement that will see it sell its global lottery business to a subordinate of Canadian financial services giant Brookfield Asset Management Incorporated.
The Las Vegas-headquartered firm used an official Wednesday press release to detail that the arrangement with the Brookfield Business Partners LP subsidiary is expected to close during the second quarter of 2022 and encompass a $5.825 billion cash component as well as earn-outs that could reach as high as $225 million depending on the lottery division’s earnings performance over the course of the next two financial years.
Listing reverse:
Scientific Games Corporation had earlier been planning to float its lottery business on the Australian Securities Exchange but has now cancelled this exercise in favor of an outright sale. The move comes only a month after the giant company inked a cash-and-stock arrangement worth in the region of $1.2 billion that is to see global entertainment and sports firm Endeavor Group Holdings Incorporated take over its OpenBet sportsbetting business.
Determined dominance:
Barry Cottle (pictured), serves as the President and Chief Executive Officer for Scientific Games Corporation and he used the press release to disclose that his firm’s lottery operation has long-standing relationships with some 130 entities in over 50 countries and supplies these with a range of turnkey solutions including scratchcard and terminal-generated lottery products, retail and systems technologies and iLottery innovations. The executive moreover described the subordinate as ‘the market leader in instant games’ courtesy of an around 69% market share in advance of proclaiming that its divestiture will allow his company to streamline its operations, provide flexibility, unlock shareholder value and accelerate its ‘strategic vision and singular focus to be the leading cross-platform global games company.’
Read a statement from Cottle…
“This transaction is transformative in accelerating the delivery of our stated strategy to optimize our portfolio, aggressively de-lever our balance sheet and position us to invest in future growth. We conducted a thorough review of paths to divest the lottery business and are confident that this transaction maximizes value and certainty while minimizing complexity and execution risk and positions both Scientific Games Corporation and its lottery business for continued success along their unique growth trajectories.”
Considered conversion:
For his part and David Nowak, Managing Partner for Brookfield Business Partners LP, proclaimed that the lottery enterprise will remain headquartered in Atlanta, Georgia, following the completion of the sale and have operations ‘around the world’. He additionally heralded the subsequent inking of a twelve-month ‘transitional services agreement’ with Scientific Games Corporation that is to see the Nevada firm supply its latest acquisition with ‘certain finance, information technology, regulatory compliance, legal, human resources and facilities at cost.’
Nowak’s statement read…
“Scientific Games Corporation’s lottery team has built a leading business that has innovated its industry at the convergence of games, technology and services across retail and digital channels for its global customers. With our capabilities and global reach, we look forward to supporting management in the continued growth of the business.”
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