Scientific Games to divest lottery and sports betting businesses as part of content-led pivot
International technology supplier reveals it is “evaluating strategic alternatives” including IPO and SPAC combination or straight sale
Scientific Games has revealed it is in talks to divest its lottery and sports betting businesses from the main group as part of a wider focus on becoming a content-led digital business.
In a statement, the igaming supplier said it was “evaluating strategic alternatives” to facilitate the sales of each business including via an initial public offering (IPO), a potential reverse merger with a Special Purpose Acquisition Company (SPAC) or via a straight sale of the businesses.
“There can be no assurances that Scientific Games’ exploration of alternatives for its lottery and sports betting businesses will result in any transactions or other actions by the company,” Scientific Games said.
“The company does not intend to comment on or provide updates regarding these matters unless and until it determines that further disclosure is appropriate or required based on the then-current facts and circumstances.”
US venture capital firm Macquarie Capital and London-based VC consultancy Oakvale Capital LLP are serving as advisors to the business on potential transactions, with Swaine & Moore hired as legal counsel to Scientific Games.
Should the sales proceed, the slimline Scientific Games group will consist of the firm’s land-based gaming, igaming and SciPlay businesses, which the supplier has said have “great momentum” and value generation possibilities.
Scientific Games CEO and president Barry Cottle said: “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.”
Addressing the talks, Cottle said it “reflected key steps” taken by the company to optimise its portfolio and strengthen its balance sheet.
Cottle suggested this focus on significantly delivering the business would also see it target investments in its “largest” growth opportunities.
The Scientific Games chief also revealed his ambition that the Scientific Games digital business be comparable in size to its land-based gaming division within the next three years.
“These steps will accelerate our path to become a content-led growth company focused on leading in both land-based and digital markets,” Cottle explained.
“Our company will be positioned to build great games that define the future of gaming, supported by platforms that power the best operators in the world.
“We believe these steps will enable us to capitalise on the high growth potential of each of our businesses, including their expanding digital content offerings and platforms, unlocking value for shareholders, customers and employees.
“Each of our businesses will be better positioned to partner with their respective customers and to deliver long-term growth and profitability,” the Scientific Games CEO added.
Scientific Games’ share price rose by just under 1% in early trading on the Nasdaq to $75.96.