American land-based and iGaming behemoth Scientific Games Corporation has announced that it has successfully concluded the sale of its global lottery business to a subordinate of Canadian financial services giant Brookfield Asset Management Incorporated.
The Las Vegas-headquartered colossus used an official Monday press release (pdf) to detail that the completion of the divestiture inked in September has seen it earn approximately $5 billion from gross cash proceeds of about $5.8 billion. The firm also stated that the conclusion of the deal with the Brookfield Business Partners LP subordinate ‘marks a major milestone’ in an ongoing makeover that will allow it to continue ‘transforming the company’ in the wake of a recent strategic review.
Scientific Games Corporation revealed last month that it was rebranding its gaming and iGaming arms under the new Light & Wonder moniker as part of an effort to reinforce its reputation as one of the world’s most prominent cross-platform entertainment companies. This followed the inking of a September stock-and-cash agreement worth around $1.2 billion that should see its OpenBet sportsbetting division sold off to massive American conglomerate Endeavor Group Holdings Incorporated by the end of the summer.
Barry Cottle (pictured) serves as the Chief Executive Officer for this new Light & Wonder wing and he used the press release to proclaim that the sale of his parent firm’s global lottery business fulfils a ‘key promise’ of the strategic review to bring its leveraged net debt ratio down to a ‘range of 2.5x to 3.5x.’ The supremo asserted that the move moreover follows ‘another record year’ for the offloaded concern and will now allow it ‘to accelerate growth as a stand-alone company’ via the exploitation of ‘a singular focus’ on its many customers around the planet.
A statement from Cottle read…
“The lottery business sale closing is a significant step towards streamlining our portfolio and strengthening our balance sheet as we execute on our strategy to transform our business with a singular focus on building great games and franchises to entertain our players wherever and whenever they want to play. The convergence of land-based and digital continues to gain momentum and we are strongly positioned to be a leader in the industry.”
For her part and the Chief Financial Officer for Light & Wonder, Connie James, disclosed that the proceeds from this transaction are to be utilized to exploit disciplined investment opportunities and return capital to investors via the continuation of a three-year and $750 million share buy-back program. The fiscal figure asserted that her Nevada firm furthermore intends ‘to pay down approximately $5 billion of its existing debt’ by reducing and refinancing loans while ‘paying off certain outstanding notes.’
Read a statement from James…
“The proceeds from this transaction and our strong cash profile allow us to accelerate progress on our capital allocation strategy. We now have the financial flexibility and balance sheet integrity that, combined with our double-digit growth profile and high mixture of digital and recurring revenues, give us a tremendous opportunity to continue to drive shareholder value.”