Lottery giant Scientific Games Corp. completed its $1.5 billion buyout of slot machine maker WMS Industries Friday, less than 10 months after the merger was announced.
New York-based Scientific Games announced the deal’s completion through a filing with the Securities and Exchange Commission. Scientific Games paid WMS shareholders $26 per share. The transaction was approved by WMS shareholders and the Federal Trade Commission.
The merger leaves Scientific Games with $3 billion in debt, as well as a $300 million line of credit for expansion.
Scientific Games is primarily a lottery service provider to several U.S. states and various countries around the world. During a licensing hearing last month in front of Nevada gaming regulators, Scientific Games Chief Financial Officer Jeffrey Lipkin said overall lottery sales worldwide were $275 billion annually, with $65 billion coming from the United States.
Nevada does not have a state lottery.
The merger gives Scientific Games a foothold in the slot machine business through ownership of the casino industry’s third largest manufacturer.
Scientific Games CEO Lorne Weil told gaming regulators that post merger, the company will separately operate two divisions, gaming and lottery. Weil said the combined companies would have $600 million in pretax earnings on a pro forma basis in 2013. The merger is expected to result in $100 million in cost savings.
Scientific Games’ systems business would be integrated into WMS’s slot machine operations. At the same time, WMS’ slot machine content and game themes would be utilized in Scientific Games’ lottery business.
The company intends to maintain WMS’s 145-person sales and service headquarters in Las Vegas.
“We continue to like the combination of the two companies as we believe there is sizable revenue and cost synergies from the merger,” Eilers Research Principal Todd Eilers told investors Friday.
Scientific Games’ largest shareholder is financier Ronald Perelman, who is ranked 27th on the Forbes 400 list of billionaires with a net worth of $14 billion. Perelman owns 38 percent of the company.
“It’s a fabulous deal,” Perelman, 70, said in an interview in September.
Perelman, who also owns a large stake in cosmetics giant Revlon, said his investment fund had looked at acquiring “a destination resort” a few years ago, but decided it was more a real estate investment. He explored other ways to enter the casino industry.
“We like gaming and it’s a great industry,” Perelman said.
Contact reporter Howard Stutz at firstname.lastname@example.org or 702-477-3871. Follow @howardstutz on Twitter.