Bally Technologies shareholders late Tuesday approved the slot machine manufacturer’s $5.1 billion buyout by lottery giant Scientific Games Corp., paving the way for the acquisition to be completed by the end of the year.
New York-based Scientific Games is paying $83.30 per share to acquire all outstanding shares of Las Vegas-based Bally, valued at $3.3 billion. The lottery company is also assuming $1.8 billion in debt.
Scientific Games and Bally announced the transaction in July.
More than 99.61 percent of the Bally shareholders represented at a special meeting approved the transaction.
The votes represented approximately 76.97 percent of the outstanding common stock eligible to vote as of the Oct. 20 record date.
The shareholder vote was one of the conditions required to close the transaction.
On Thursday, the Nevada Gaming Control Board and Nevada Gaming Commission will hold hearings in Las Vegas to discuss the merger.
Earlier this week, Scientific Games announced it completed the financing for the Bally buyout. The company said it priced out $3.15 billion of debt to be used in the transaction. In October, the company said it raised $2 billion for the merger.
Acquiring Bally would strengthen Scientific Games’ push into the slot machine side of the business. Last year, Scientific Games bought slot machine maker WMS Industries for $1.5 billion.
During the Scientific Games’s third quarter earnings conference call, company CEO Gavin Isaacs said the acquisition would increase the company’s cash flow and reduce obligations taken on by the deal.
“Our goal is to primarily use our increased free cash flow to pay down debt and bring our leverage ratios back to more optimal levels,” Isaacs said.
Isaacs served as chief operating officer of Bally before becoming CEO of SHFL entertainment. Last year, Bally bought SHFL for $1.3 billion. Isaacs became CEO of Scientific Games earlier this year.
Isaacs said the transaction came about quickly after a few weeks of talks between Scientific Games and Bally.
“If you have a great idea in the synergies and meeting of the minds and then strategies all align, why is there any reason to procrastinate,” Isaacs said.
Scientific Games said the transaction would result in $220 million in annual cost savings and $25 million of annual capital expenditure savings by the end of the second year.
In a filing with the Securities and Exchange Commission in September, Scientific Games said the buyout could lead to a 21 percent reduction in the combined companies’ non-manufacturing and production workforce.
The number of jobs eliminated would provide a cost savings of $83 million — 57 percent of the anticipated $144 million in reductions expected in the merger’s first year.
The information was part of a presentation officials from Scientific Games and Bally made to prospective lenders being sought to fund the transaction.
The deal is one of two high-profile gaming industry mergers taking place in the manufacturing sector. Also in July, Italian lottery company GTECH Holdings agreed to buy slot machine maker International Game Technology for $6.4 billion.
The transaction is still pending and is expected to close early next year.
Contact reporter Howard Stutz at firstname.lastname@example.org or 702-477-3871. Follow @howardstutz on Twitter.