LAS VEGAS, Oct. 27, 2021 /PRNewswire/ -- Scientific
Games Corporation (NASDAQ: SGMS) ("Scientific Games," "SGC" or the
"Company") today announced that it has entered into a definitive
agreement to sell its Lottery business to Brookfield Business
Partners L.P. (NYSE:BBU) (TSX:BBU.UN) ("Brookfield Business
Partners") together with its institutional partners (collectively
"Brookfield") for total
consideration of $6.05 billion
consisting of $5.825 billion in cash
and an earn-out of up to $225 million
based on the achievement of certain EBITDA targets in 2022 and
2023. The transaction is expected to close in the second quarter of
2022, subject to applicable regulatory approvals and customary
closing conditions.
Scientific Games' Lottery business ("Scientific Games Lottery"
or "SG Lottery") is a leading, diversified global lottery partner
with long-standing relationships with approximately 130 government
and non-government lottery entities in over 50 countries. It
provides an innovative suite of turn-key solutions covering the
entire lottery ecosystem, including instant and terminal-generated
lottery games, sports betting, lottery systems and retail
technology and the fast-growing iLottery market. The Lottery
business is the market leader in instant games with a broad array
of products and services powering approximately 69% of instant
product retail sales globally.
"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 we are confident that this transaction
maximizes value and certainty while minimizing complexity and
execution risk, and positions both Scientific Games and SG Lottery
for continued success along their unique growth trajectories," said
Barry Cottle, President and Chief
Executive Officer of Scientific Games. "The significant near-term
proceeds from this transaction as well as our previously announced
sale of Sports Betting will transform our balance sheet and provide
the financial flexibility to invest organically and inorganically
to accelerate our strategies. This marks a major milestone and puts
us on a clear path to achieve our vision to become the leading
cross-platform global game company and unlock our full value for
shareholders."
"We are thrilled with this outcome and what it means for the
future of Scientific Games Lottery and our customers," said
Patrick McHugh, Chief Executive of
Scientific Games Lottery. "I am confident that, with Brookfield's support, we will have the
flexibility and agility to expand our deep product portfolio to
meet our customers' evolving needs and maximize lottery beneficiary
proceeds across the globe, enabling us to capture the significant
opportunities we see ahead."
"The Scientific Games Lottery team has built a leading business,
which has innovated its industry, at the convergence of games,
technology and services, across retail and digital channels for its
global customers," said David Nowak, Managing Partner,
Brookfield Business Partners. "With our capabilities and global
reach, we look forward to supporting management in the continued
growth of the business."
Headquarters and Operations
SG Lottery will remain headquartered in metro-Atlanta with operations expected to continue
around the world.
SG Lottery has entered into a Transitional Services Agreement
with Scientific Games Corporation whereby Scientific Games
Corporation will provide SG Lottery certain finance, information
technology, regulatory compliance, legal, human resources and
facilities at cost for an initial term of 12 months.
Advisors
Macquarie Capital (USA) Inc. is
serving as financial advisor and Cravath, Swaine & Moore LLP is
serving as legal counsel to Scientific Games.
© 2021 Scientific Games Corporation. All rights reserved.
About Scientific Games
Scientific Games Corporation (NASDAQ: SGMS) is a world leader in
entertainment offering dynamic games, systems and services for
casino, lottery, online gaming and sports betting. Scientific Games
offers the gaming industry's broadest and most integrated portfolio
of game content, advanced systems, cutting-edge platforms and
professional services. Committed to responsible gaming, Scientific
Games delivers what customers and players value most: trusted
security, engaging entertainment content, operating efficiencies
and innovative technology. For more information, please visit
scientificgames.com.
About Brookfield Business Partners L.P.
Brookfield Business Partners is a business services and industrials
company focused on owning and operating high-quality businesses
that benefit from barriers to entry and/or low production
costs.
Brookfield Business Partners is the flagship listed business
services and industrials company of Brookfield Asset Management, a
leading global alternative asset manager with over $625 billion of assets under management. More
information is available at www.brookfield.com.
Brookfield Business Partners is listed on the New York and Toronto stock exchanges. For more important
information, please visit our website at
https://bbu.brookfield.com.
Investor Inquiries:
Jim Bombassei, Senior Vice President
of Investor Relations
IR@scientificgames.com
Media Inquiries:
Nick Lamplough / T.J. O'Sullivan /
Lucas Pers, Joele Frank, Wilkinson Brimmer Katcher, +1 212
355 4449
Forward-Looking Statements:
This communication contains "forward-looking statements" within the
meaning of the U.S. Private Securities Litigation Reform Act of
1995. Forward-looking statements can be identified by words such as
"will," "may," and "should." These statements are based upon
Scientific Games' management's current expectations, assumptions
and estimates regarding the proposed transaction between Scientific
Games and Brookfield, the expected
benefits of the proposed transaction, the expected timing of
completion of the proposed transaction and anticipated future
financial and operating performance and results. Forward-looking
statements are not guarantees of timing, future results or
performance. Therefore, you should not rely on any of these
forward-looking statements as predictions of future events. Actual
results may differ materially from those contemplated in these
statements due to a variety of risks, uncertainties and other
factors, including (i) the risk that the conditions to the closing
of the proposed transaction may not be satisfied, (ii) the risk
that a material adverse change, event or occurrence may affect
Scientific Games and Brookfield
prior to the closing of the proposed transaction and may delay the
proposed transaction or cause the companies to abandon the proposed
transaction, (iii) the possibility that the proposed transaction
may involve unexpected costs, liabilities or delays, (iv) the risk
that the businesses of the companies may suffer as a result of
uncertainty surrounding the proposed transaction and (v) the risk
that disruptions from the proposed transaction will harm
relationships with customers, employees and suppliers or (vi) that
Scientific Games may be unable to achieve expected financial,
operational and strategic benefits of the proposed transaction, and
those factors described in Scientific Games' filings with the
Securities and Exchange Commission (the "SEC"), including
Scientific Games' current reports on Form 8-K, quarterly reports on
Form 10-Q and its latest annual report on Form 10-K filed with the
SEC on March 1, 2021 (including under
the headings "Forward-Looking Statements" and "Risk Factors").
Forward-looking statements speak only as of the date they are made
and, except for Scientific Games' ongoing obligations under the
U.S. federal securities laws, Scientific Games undertakes no
obligation to publicly update any forward-looking statements
whether as a result of new information, future events or
otherwise.
View original content to download
multimedia:https://www.prnewswire.com/news-releases/scientific-games-announces-sale-of-lottery-business-to-brookfield-business-partners-for-6-05-billion-301410445.html
SOURCE Scientific Games Corporation