With Perelman Gone, Scientific Games to Sell Sports-Betting Unit
(Bloomberg) -- Scientific Games Corp., the slot machine manufacturer built up through a series of acquisitions by investor Ron Perelman, is now retooling itself under new management.
The company is looking to divest its lottery and sports-betting businesses. That could happen through a sale, initial public offering or merger with a special purpose acquisition company, Las Vegas-based Scientific Games said in a statement Tuesday. The company, one of the largest suppliers of gear and services to casinos worldwide, said it intends to focus on gambling content, like its physical and online games.
Executive Chair Jamie Odell and Executive Vice Chair Toni Korsanos made the announcement, which they said the board supported.
“When I joined the board in September 2020, I told stakeholders that we were focused on rapidly deleveraging the balance sheet,” Odell said in the statement.
Scientific Games shares were up 2.1% to $77.58 at 3:32 p.m. in New York. The stock has soared 87% this year.
Over the past decade, Scientific Games grew rapidly under the direction of its then-largest shareholder, Perelman. It completed the acquisition of slot machine maker Bally Technologies Inc. in 2014 for $5.1 billion and fought a takeover battle for sports-betting provider NYX Gaming Group. Other acquisitions included WMS Industries and ShuffleMaster.
The deals left the company with more than $9 billion in debt. Perelman sold the bulk of his shares last year as part of a broader rethinking of his holdings.
The lottery business could be worth as much as $5 billion, while the sports betting unit is worth just under $1.3 billion, Truist Securities analyst Barry Jonas said in a research note. The move to sell some parts of the company suggests that customer purchases are very specific these days and less likely to involve bundling with other products, he said.
Macquarie Capital Inc. and Oakvale Capital are serving as financial advisers to Scientific Games.
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