Scientific Games will sell its lottery business to private equity company Brookfield Business Partners for $6.05bn.
Canada.- Canadian investment firm Brookfield Business Partners, is putting forward $6bn to buy Scientific Games lottery business. The deal includes an initial $5.83bn in cash and an earn-out of up to $225m, based on the business achieving certain earnings before interest, tax, depreciation and amortisation targets in 2022 and 2023.
The sale of SG Lottery is part of a large-scale debt reduction effort initiated by Scientific Games in late June, which also included the recent sale of its OpenBet sports wagering arm for $1.2bn in cash and equity.
According to Scientific Games, the lottery business powers approximately 69 per cent of instant product retail sales globally.
Scientific Games’ president and chief executive Barry Cottle said: “This transaction is transformative in accelerating the delivery of our stated strategy to optimise our portfolio, aggressively de-lever our balance sheet and position us to invest in future growth.”
Cottle also stated: “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.”
He said this deal marks a major milestone and puts them “on a clear path to achieve our vision to become the leading cross-platform global game company and unlock our full value for shareholders.”
Brookfield Business Partners’ managing partner David Nowak added: “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.
The deal is expected to close in the second quarter of 2022.