Scientific Games moves to fully acquire SciPlay
Supplier giant views subsidiary as perfect fit for new content-led strategy as it eyes remaining 19% stake
Scientific Games has submitted a proposal to acquire the remaining equity interest that it does not currently own in SciPlay.
The Las Vegas-based supplier has contacted SciPlay’s board of directors to notify them of its intention to acquire the remaining 19% in SciPlay in what would be an all-stock transaction.
The proposal from Scientific Games states that SciPlay shareholders would receive 0.25 shares in Scientific Games stock for each share of SciPlay common stock.
This would represent an implied enterprise value of $1.9bn and a 10.1x purchase multiple of expected 2021 EBITDA for the SciPlay division.
The move to acquire the remaining shares is part of the new strategic outlook from Scientific Games after putting its lottery and sports betting segments up for sale.
The supplier is looking to become a “content-led growth company” with a core focus on digital gaming and views SciPlay as fitting “perfectly” into this new strategic outlook.
In a letter outlining the proposal, Scientific Games CEO Barry Cottle said: “We believe a merger of Scientific Games and SciPlay will deliver significant operational, strategic and financial benefits and drive shareholder value in excess of what each company could generate on a standalone basis.
“Further, we believe SciPlay public shareholders will benefit from increased trading liquidity as a result of being part of a pro forma entity with a market cap of $7bn (based on the closing share prices of SGMS and SciPlay on July 14, 2021) and a public float that would be approximately 18x larger than SciPlay today.
“Through our existing collaboration with SciPlay, we believe a transaction would be seamless and we look forward to fully joining forces with SciPlay’s talented leadership team and employees to continue innovating on behalf of customers and players,” he added.