Scientific Games Separates From Its Own Lottery Business

Debt settlement is the reason for the sale

Last Wednesday, Scientific Games announced on its own homepage that its own lottery business would be completely sold. The buyer will be the investment firm Brookfield Business Partners, which will cost the lottery business a whopping $6 billion (5.2 billion euros). For Scientific Games it is an extremely lucrative business, as CEO Barry Cottle explains. He emphasizes that the sale is crucial for quickly implementing your strategy, optimizing your own portfolio and quickly reducing your balance sheet. In addition, Scientific Games would also like to make investments itself in order to promote its own growth in the future.

Another reason for selling to Brookfield Business Partners is the quick payment processing. Accordingly, Scientific Games will receive a large part of the purchase price in cash. Apparently, the US gaming provider will be paid USD 5.8 billion in one fell swoop, while a further USD 225 million in performance-related bonuses will be added over the next two years. For this reason, the sale of the lottery business is considered a win-win situation, as the value can be maximized for the shareholders, while in return the complexity of one's own business is significantly reduced.

Drastically reduce the mountain of debt

Scientific Games can put the USD 6 billion in income to good use, as the group currently has liabilities of USD 9.5 billion. For this reason, selling is considered an extremely lucrative business to significantly improve your own balance sheet. In addition, selling the lottery business is not the only solution to improving the balance sheet. Back in September, the in-house sports betting brand OpenBet was sold for $1.2 billion. However, the buyer was different: Endeavor Group Holdings.

Brookfield expands its lottery portfolio

For the investment firm Brookfield Business Partners, however, the $6 billion purchase is not considered an entry into the lottery industry. In fact, the company already cooperates with over 130 lottery companies in over 50 different countries. The new acquisition of Scientific Games is intended to expand the lottery business while Brookfield gains access to their innovative technologies.

In addition, both companies were able to agree that the lottery business will continue to be operated under the same SG Lottery brand in the future. The headquarters will also remain in Atalanta, which is why employees do not have to fear any far-reaching changes. Rather, small changes are being made to the company structure.

Scientific Games separates from its own lottery business