By Clyde Mooney – editor Australian Hotelier
Still hot from its recent acquisition of SHFL Entertainment, American gaming giant Bally Technologies is set to be acquired by an even bigger US player.
Scientific Games Corporation (SGMS) produces technology-based products, services and content for gaming and lottery markets, and has entered a “definitive merger agreement” with Bally, expected to be in effect by early 2015.
SGMS will acquire all outstanding Bally stock for $83.30 per share, representing a 38 per cent premium at 31 July, 2014, and a total aggregate price of approximately $5.1 billion.
Both entities will be present at Bally’s stand at the Australasian Gaming Expo next week, including SGMS president and CEO Gavin Isaacs, who has labelled the deal a “unique opportunity”.
“With leading gaming, lottery, and interactive content, world-class systems capabilities and table game offerings, we believe that the combined company will be uniquely positioned as a strategic partner for gaming and lottery operators,” Isaacs said.
“The combined company will feature world-class research and development capabilities, an expanded base of recurring revenues and greater worldwide penetration in key geographies, including the AustralAsia region.”
The two companies generate combined revenue of approximately $3.0 billion (YTD 31.3.14) and anticipate in excess of $240 million in cost synergies and capital expenditure savings from the consolidation, coming predominantly through efficiencies in manufacturing, engineering, customer service and administration.
The merger is subject to customary closing conditions, including Bally shareholder approval and antitrust and gaming regulatory approvals, which are expected to be aided by the fact that the two companies are both licensed in more than 300 gaming jurisdictions worldwide.