Scientific Games divesting from its in-house lottery operations
**Scientific Games Sells Lottery Business to Brookfield Business Partners for $6 Billion**
In a significant move aimed at corporate restructuring and financial optimization, Scientific Games has announced the sale of its entire lottery business to investment firm Brookfield Business Partners. The deal, worth $6.05 billion, is set to bring about major changes for both companies.
For Scientific Games, the sale provides a substantial influx of cash, which will be used to reduce debt, invest in growth opportunities, or return value to shareholders. This capital boost improves the company's liquidity and financial flexibility. The sale of its lottery business does not include its sports betting operations, which remain separate.
Brookfield Business Partners, on the other hand, sees this acquisition as a strategic investment, expanding its portfolio by adding a stable, potentially high-revenue asset in the gaming sector. The deal positions Brookfield to benefit from the steady cash flows and growth potential of the lottery business. Brookfield already cooperates with over 130 lottery societies in over 50 different countries.
The headquarters of Scientific Games will remain in Atlanta, ensuring employees do not have to worry about major changes. The sale includes a significant upfront cash payment of $5.8 billion, with additional success-based bonuses of $225 million over the next two years.
The sale of Scientific Games' lottery business is expected to significantly improve the company's balance sheet, as it currently has $9.5 billion in debt. This move follows another transaction in September, when Scientific Games sold its in-house sports betting brand OpenBet for $1.2 billion to the Endeavor Group Holdings.
CEO Barry Cottle noted that the sale is crucial for optimizing Scientific Games' portfolio, while the sale to Brookfield Business Partners is seen as a win-win situation, maximizing shareholder value and reducing the complexity of Scientific Games' business. The lottery business will continue to operate under the same SG Lottery brand in the future.
The sale price of $6 billion (€5.2 billion) represents a significant transaction enhancing Scientific Games’ financial situation while providing Brookfield with a valuable asset to grow its business. Though detailed financial metrics such as exact debt reduction or profit expectations were not available, the deal is expected to have a positive impact on both companies. Only minor changes to the company's structure are planned.
What will the sale of Scientific Games' lottery business bring for Scientific Games? It will provide a substantial influx of cash for debt reduction, growth investments, or shareholder returns, improving the company's liquidity and financial flexibility.
How does Brookfield Business Partners view the acquisition of Scientific Games' lottery business? They see it as a strategic investment, expanding their portfolio by adding a stable, potentially high-revenue asset in the gaming sector, positioning themselves to benefit from the steady cash flows and growth potential of the lottery business.
