2 Minutes Read
Poker world has been agog with multi-billion dollar takeover deals recently, such as Amaya taking over the Oldford Group for $4.9 billion and Italian lottery giant Gtech announcing its plans to acquire slot machine manufacturer, IGT International Game Technology for $6.4 billion.
Now news has come in about another huge merger that involves Las Vegas-based Bally Technologies and Scientific Games Corporation for a sum of $5.1 billion.
The announcement was made on Friday and received with approval by the financial markets, as stocks of both the companies shot up after the news. Together, Bally Technology and Scientific Games had revenue of $3 billion, ending this last fiscal year March 31, 2014.
This will be the second acquisition by the Scientific Games and the $5.1 billion deal will also, include Bally’s existing debt of $1.8 billion.
Recently appointed President of Scientific Games, Gavin Isaacs spoke about this second merger, “The acquisition of Bally provides us with a unique opportunity to combine two exceptional companies with long track records of creating leading-edge games and gaming technology products for players and delivering innovative solutions to our customers. I am confident this combination brings together best-of-breed cultures and is occurring at a truly opportune time as both companies are committed to bringing the highest value products and services to customers.”
Isaacs continued, “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. In addition to the strategic value of the transaction to our customers, we expect to create significant shareholder value as the transaction is expected to deliver immediate earnings and cash flow accretion and will allow us to meaningfully reduce our leverage over the next three to four years.”
Richard Haddrill, CEO of Bally responded, “We look forward to working with our new colleagues at Scientific Games to execute a detailed integration plan to realize customer satisfaction and additional value. The combination with Scientific Games will benefit our customers and shareholders. 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.“
A press release gave details about the deal and said that Scientific Games had agreed to acquire all Bally’s outstanding stock at a premium 38% hiked price of $83.30 cash per share.
The merger is set to be financed by BofA Merril Lynch, J.P. Morgan, and Deutsche Bank Securities Inc with both, cash and credit facilities. It is expected that the deal will be completed after approvals from necessary regulatory bodies come in, sometime in early 2015.
In hours, NASDAQ registered a 28% hike in the share of Scientific Games, which closed at $10.95, while Bally’s rose by 29% to $77.97 on the NYSE.
Image Courtesy: gamblingnews.ca