Scientific Games Corporation and WMS Industries have announced that the companies have entered into a definitive agreement under which Scientific Games has will acquire WMS for $26.00 in cash per common share or approximately $1.5 billion.
transaction, which was unanimously approved by both the Scientific Games and
WMS Boards of Directors, combines two leading companies in the gaming industry
to create an organization that will supply an extensive range of products and
services to public and private sector lottery and gaming customers throughout
the world. Scientific Games is a leader in the supply of lottery instant
tickets, lottery and video gaming systems and serverâbased gaming. WMS is a leader in the supply of
gaming machines and interactive gaming content.
$1.5 billion acquisition, which represents six times annual WMS EBITDA of $246 million plus company debt of $85 million
and cash on hand of $55 million as of September 2012, is subject to the
approvals of WMS shareholders and gaming regulatory authorities and other
customary closing conditions. It is expected to be completed by the end of
Games has obtained committed financing for the transaction and the transaction
is not subject to a financing contingency.
acquisition of WMS is transformational for Scientific Games, enabling us to
offer a complete portfolio of lottery and gaming products and services to both
new and existing customers around the world,” said A. Lorne Weil, chairman and
CEO of Scientific Games, in a prepared statement. “We expect to combine our
game content, technology, operational capabilities and respective geographic
footprints to create an enterprise poised to capitalize on significant growth opportunities
around the globe.”
combination will diversify Scientific Games' revenue base, expand margins and
propel future growth opportunities,” added Jeffrey S. Lipkin, CFO, Scientific
Games. “Importantly, as we realize efficiencies from our increased size and
scope, we should be able to deliver meaningful value to shareholders through
the deal's immediate earnings per share accretion, significantly improved free
cash flow and anticipated synergies.”
the returns from a combined Scientific Games/WMS Industries could be quite
lucrative, if the past year financial performance for both holds true.
According to company reports, when anticipated synergies are excluded, the
combined companies generated revenue of approximately $1.6 billion and attributable
EBITDA of approximately $579 million over the trailing 12âmonth period ended September 2012.
combination of Scientific Games and WMS yields tremendous benefits to our
customers, shareholders and employees,” said Brian R. Gamache, chairman and CEO
of WMS. “We view this transaction as the next logical and strategic step in
offering continued innovation in gaming. Shareholders will enjoy a meaningful
premium for their shares and employees will have expanded career opportunities
as part of a larger, broader and more diverse organization. We are delighted
with this transaction and look forward to working with our new colleagues at
Games benefits from the WMS acquisition include:
operating efficiencies: Scientific
Games expects to achieve synergies through revenue growth, shared costs and
larger scale, as well as by monetizing its significant U.S. tax attributes. The
combined company will also be able to efficiently utilize shared manufacturing,
engineering, software, field maintenance and customer service to drive growth
and cost savings.
businesses leveraging core competencies: Scientific Games and WMS will draw on
each organization's core strengths to broaden offerings, bring gaming products
to new sectors and geographies, accelerate key growth initiatives and offer
enhanced capabilities, systems, field service and content. Scientific Games'
strong global footprint, including its position in serverâbased gaming, should help accelerate WMS'
international development initiatives. The addition of WMS' gaming business will
also diversify Scientific Games' global business assets. Furthermore,
Scientific Games and WMS are both known for their product innovation and
creative content and will offer an expansive combined portfolio to customers.
The combined company will be well positioned to capitalize on government
sponsored gaming utilizing Scientific Games' established global platform and
experience in providing lottery and gaming systems, products and services to governments.
position in Interactive gaming: The combined
iLottery/iGaming platform and content will significantly expand the scope of
the combined company's interactive products. WMS has a wellâdeveloped iGaming platform, including social and
mobile gaming, while Scientific Games has an advanced platform for iLottery,
sports book and loyalty/rewards. Scientific Games expects significant
opportunities to crossâsell these
products to the companies' respective customers.
Scientific Games to acquire WMS in $1.5 billion deal
January 31, 2013