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US – Scientific proposes merger with SciPlay

By - 15 July 2021

Scientific Games has submitted to the Board of Directors of SciPlay Corporation a proposal for Scientific Games to acquire the remaining 19 per cent equity interest in SciPlay that it does not currently own in an all-stock transaction, following which SciPlay would become a wholly-owned subsidiary of Scientific Games.

Scientific said: “This Proposed Transaction is another important step forward on the strategy Scientific Games recently announced to become a content-led growth company with a particular focus on digital markets and unlock the value of the Company’s products and technologies. SciPlay fits perfectly into Scientific Games’ focus on building engaging content and launching great games more fully cross-platform.”

Scientific Games expects the transaction to be immediately accretive to the value of the Company’s shares offering SciPlay shareholders a premium for their investment and the opportunity to participate in the upside potential of Scientific Games as it transforms its portfolio and executes on its strategy to drive long-term sustainable growth and significant shareholder value.

Barry Cottle, President and Chief Executive Officer, said: “We believe a merger of SGMS and SciPlay will deliver significant operational, strategic and financial benefits and drive shareholder value in excess of what each company could generate on a standalone basis. Further, we believe SciPlay public shareholders will benefit from increased trading liquidity as a result of being part of a pro forma entity with a market capitalization of $7bn (based on the closing share prices of SGMS and SciPlay on July 14, 2021) and a public float that would be approximately 18x larger than SciPlay today.

“Through our existing collaboration with SciPlay, we believe a transaction would be seamless and we look forward to fully joining forces with SciPlay’s talented leadership team and employees to continue innovating on behalf of customers and players.”

He added that the deal would ‘accelerate SGMS’s vision of becoming a leading cross-platform global game company through the integration of SciPlay by leveraging content, game mechanics and our new game development roadmap to create an enhanced player experience across land-based and digital platforms as we see increasing convergence.’

“SciPlay will be a key component in SGMS’s goal of growing our digital business to be comparable in size with our land-based business within three years. SGMS recently announced our intent to divest our Lottery and Sports Betting businesses, which will strengthen our balance sheet by materially de-levering, while creating the financial capacity to invest in our largest growth opportunities, including the SciPlay business.”

It would also give ‘SciPlay continued access to new content, including the robust game roadmap that SGMS is advancing, beyond the 2022 expiry of the current IP Licensing Agreement.’

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