Scientific Games to acquire Bally in US$5.1bn deal
Two gaming giants will merge next year after Scientific Games agrees to pay US$5.1bn including $1.8bn of existing Bally debt
Scientific Games has revealed it is to acquire Bally Technologies for US$5.1bn, creating a global gaming company with revenues of around $3bn per year.
The deal will see Scientific Games pay $83.30 per share for the supplier, putting the total value of the acquisition at $5.1bn including $1.8bn of existing Bally debt. The takeover is expected to close early next year.
The acquisition comes just months after Scientific Games’ $1.5bn buyout of slots giant WSM, which completed in October last year, and Bally’s $1.3bn takeover of SHFL, which completed in November 2013.
Newly appointed Scientific Games CEO Gavid Isaacs said the acquisition of Bally provides a “unique opportunity to combine two exceptional companies with long track records of creating leading-edge games and gaming technology products”.
The acquisition is expected to realise around $200m in annual cost synergies and $25m of annual capital expenditure savings by the end of the second year following closing of the transaction.
However Scientific Games anticipates incurring $75m of costs to achieve the cost synergies, and $40m in capital costs to complete the integration of the companies.
“The combination with Scientific Games will benefit our customers and shareholders,” Richard Haddrill, Bally’s CEO, said.
“Increased scale, geographic diversity and product development capabilities will create a new runway of growth opportunities through new products and a comprehensive portfolio of customer-focused solutions.
“This transaction delivers immediate value to our shareholders, and the highest share price in our history. We look forward to working with our new colleagues at Scientific Games to execute a detailed integration plan to realise customer satisfaction and additional value,” he added.
Upon closing of the transaction Isaacs will continue as CEO of Scientific Games, and it is anticipated that Haddrill, chairman of the board of directors of Bally, will join the board of directors of Scientific Games, serving as vice chairman.