April 5, 2019 - 3:18 pm
Scientific Games is moving ahead with plans to sell shares in its social gaming division as its seeks to pay down more than $9 billion in debt.
Scientific Games said Friday it filed a registration statement with the Securities and Exchange Commission to sell shares in SciPlay and list them on the NASDAQ exchange under the ticker SCPL.
The Las Vegas-based company has chosen Merrill Lynch, JPMorgan, Goldman Sachs, Morgan Stanley, Deutsche Bank, Macquaire Capital, and RBC Capital Markets to manage the IPO, it said in a statement. Scientific Games did not state how much it planned to raise or the amount of shares it plans to sell.
SciPlay is one of Scientific Games’ fastest growing business segments. SciPlay revenues rose 19 percent last year to $114 million while its cash flow grew even faster, jumping 30 percent to $28.3 million. SciPlay margins expanded to nearly 25 percent last year. The division offers 1,800 online social games including Jackpot Party, Bingo Showdown and MONOPOLY Slots.
Scientific Games is among the most leveraged names in the gaming industry with roughly $9.2 billion in net debt outstanding as of Dec. 31, nearly seven times its 2018 operating cash flow of $1.33 billion.
Shares of Scientific Games plummeted last year, falling more than 75 percent from their May peak of $62.80 to the December low of $14.79, amid concern the company could struggle to pay down debt if the global economy slides into recession.
CEO Barry Cottle said in February the company would use funds from the share sale of SciPlay to cut its debt.
Shares of Scientific Games jumped as much as 13 percent Friday on the news and closed up 5.9 percent to $21.85.