Following the completion of a comprehensive strategic review into its business and American land-based and iGaming behemoth Scientific Games Corporation has announced that it will be divesting its lottery and sportsbetting businesses.
The Las Vegas-headquartered firm used an official Tuesday press release to proclaim that the move is part of a plan ‘to drive long-term sustainable value’ by becoming a ‘content-led growth company with particular focus on digital markets’. The giant moreover stated that the intended divestiture will allow it to ‘significantly de-leverage’ in order to drive growth and reduce a deficit that currently stands in the region of $9.5 billion.
Scientific Games Corporation detailed that it is to now investigate several disposal options including via an initial public offering, a sale or combination involving another business or a merger with an independent special purpose acquisition company (SPAC). The enterprise went on to pronounce that it does not ‘intend to comment on or provide updates’ concerning the disposal process moving forward unless it deems such communication ‘appropriate or required based on the then-current facts and circumstances.’
Barry Cottle serves as President and Chief Executive Officer for Scientific Games Corporation and he used the press release to assert that the planned divestiture is being supported by the company’s board of directors and will result in a firm that is ‘positioned to build great games that define the future of gaming.‘ The boss moreover declared that the move will simultaneously ‘unlock value for shareholders, customers and employees’ by better positioning each of its divisions ‘to deliver long-term growth and profitability.’
Read a statement from Cottle…
“As the leading cross-platform global game company, we are uniquely positioned to take advantage of the incredible industry transition that is underway. Given this significant opportunity, we are targeting our digital businesses to be comparable in size to the land-based gaming business within three years. I’m confident that, with these steps, we are well positioned for future growth prospects.”
The Bloomberg news service used its own Tuesday report to explain that Scientific Games Corporation grew quickly over the past decade under the leadership of its then-largest shareholder, billionaire American entrepreneur Ron Perelman. The source divulged that the company spent around $1.5 billion in 2013 to buy lottery and iGaming doyen WMS Industries Incorporated before acquiring prominent slot machine innovator Bally Technologies Incorporated the very next year for in the region of $5.1 billion.
However, Bloomberg disclosed that Perelman offloaded the majority of his interest in Scientific Games Corporation to Australian investments firm Caledonia in September of last year. The source finished by forecasting that the Nasdaq-listed company could now recoup up to $1.3 billion by offloading its sportsbetting business with its lottery division being currently valued at an even more eye-watering $5 billion.