Scientific Games in $6.05bn sale of Lottery business to Brookfield Business Partners

By Peter Lynch

Scientific Games has entered into a definitive agreement to sell its Lottery business to Brookfield Business Partners for total consideration of $6.05bn.

The deal consists of $5.825bn in cash and an earn-out of up to $225m based on the achievement of certain EBITDA targets in the next two years.

The transaction is expected to close in the second quarter of 2022, subject to regulatory approvals and customary closing conditions.

“This transaction is transformative in accelerating the delivery of our stated strategy to optimize our portfolio, aggressively de-lever our balance sheet and position us to invest in future growth,” said Barry Cottle, President and CEO of Scientific Games.

“We conducted a thorough review of paths to divest the Lottery business and we are confident that this transaction maximizes value and certainty while minimizing complexity and execution risk, and positions both Scientific Games and SG Lottery for continued success along their unique growth trajectories.

“The significant near-term proceeds from this transaction as well as our previously announced sale of Sports Betting will transform our balance sheet and provide the financial flexibility to invest organically and inorganically to accelerate our strategies. This marks a major milestone and puts us on a clear path to achieve our vision to become the leading cross-platform global game company and unlock our full value for shareholders.”

Scientific Games’ Lottery business has long-standing relationships with approximately 130 government and non-government lottery entities in over 50 countries, with its products and services powering approximately 69% of instant product retail sales globally.

David Nowak, Managing Partner, Brookfield Business Partners, commented: “The Scientific Games Lottery team has built a leading business, which has innovated its industry, at the convergence of games, technology and services, across retail and digital channels for its global customers.

“With our capabilities and global reach, we look forward to supporting management in the continued growth of the business.”

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