November 21, 2014 - 6:48 pm
Scientific Games Corp. completed its $5.1 billion acquisition of slot machine giant Bally Technologies on Friday, finalizing the buyout is less than four months.
Las Vegas-based Bally, now considered the gaming industry’s largest gaming equipment provider based on market share, will become a wholly owned subsidiary of New York-based Scientific Games, which is one the world’s largest lottery system and equipment providers.
Scientific Games CEO Gavin Isaacs also announced a new executive management structure for the company, which is now the gaming industry’s most diversified global business with 10 components that touch all aspects of legalized gambling — lotteries, slot machines, table games, casino and lottery management systems and interactive gaming.
The transaction completes a 19-month makeover of Scientific Games, which is more than 30 percent owned by New York financier Ronald Perelman.
Last year, Scientific Games bought slot machine maker WMS Industries for $1.5 billion. Also, Bally had purchased table gaming provider SHFL entertainment for $1.3 billion.
All four companies are now under the auspices of Scientific Games. On Thursday, Isaacs hinted to Nevada regulators that Scientific Games’ corporate headquarters would shift to Las Vegas.
Scientific Games is paying $83.30 per share to acquire all outstanding shares of Bally, valued at $3.3 billion. The lottery company is assuming $1.8 billion in debt.
“Completing the Bally transaction brings together two exceptional organizations with a common culture of innovation and customer focus,” Isaacs said in a statement. “We are excited by the opportunities that will be created by combining each organization’s core strengths in developing engaging gaming entertainment products.”
The transaction is expected to create $235 million in cost savings. Isaacs hopes much of those savings will be achieved in the first year of the deal. He said the company will have 8,300 employees.
The new senior management team for the company includes executives with experience at Scientific Games, WMS, Bally and SHFL. Perelman is chairman of Scientific Games. Former Bally CEO Richard Haddrill will become vice chairman.
Scientific Games completed the financing for the buyout earlier this week, pricing out $3.15 billion of debt to be used in the transaction. In October, the company said it raised $2 billion for the merger.
Bally shareholders signed off on the deal Tuesday. Thursday’s approval by the Nevada Gaming Commission was the final regulatory hurdle.
The combined Scientific Games is expected to produce $3 billion in annual revenue.
The deal is one of two high-profile gaming industry mergers taking place in the manufacturing sector.
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. Find him on Twitter: @howardstutz