Scientific Games hopes to wholly acquire affiliate SciPlay
Casino equipment manufacturer Scientific Games has made a play at acquiring the remaining 19 per cent of digital gaming company SciPlay Corp that it doesn’t currently own.
GGR Asia reports that if the deal is concluded, SciPlay would be a wholly-owned subsidiary of Scientific Games.
The proposal has already been submitted to the board of directors at SciPlay.
Scientific Games’ proposal deal involves an all-stock transaction.
It implies a premium of 11 per cent based on the Scientific Games and SciPlay respective closing stock prices as of the close of business on 16 July.
In the proposed transaction, SciPlay shareholders would receive 0.250 shares of the digital gaming company’s common stock for each share of SciPlay Class A common stock they own.
“The proposed transaction is another important step forward for the strategy Scientific Games recently announced to become a content-led growth company with a particular focus on digital markets and unlocking the value of the company’s products and technologies,” Scientific Games said.
Scientific Games focused on “content-led growth”
The firm announced plans in late June to divest itself of its lottery and sports betting businesses as part of a company-wide strategic review.
The US-listed firm stated that it planned to focus on land-based gaming, iGaming and SciPlay businesses.
In early July, it acquired Finland-based developer and operator of casual mobile games Koukoi Games Oy.
Koukoi’s casual mobile games are built on their proprietary technology platform that includes modular game feature components and real-time multiplayer engines that can be used across games.
Koukoi, located in Oulu, Finland, developed the game “Om Nom Run”, which SciPlay said has been subject to more than 30 million downloads.
“The combination of Koukoi’s technology platform and SciPlay’s data driven ‘engine’ will be the foundation of SciPlay’s drive to further expand in the US$20 billion-plus casual gaming genre,” SciPlay said.
This is SciPlay’s third acquisition.
The first, in 2017, was Spice Rack Media, including its popular bingo game, Bingo Showdown, which was said to have more than tripled SciPlay’s revenue from games.
In 2020, SciPlay acquired games developer Come2Play.
The latter brand’s Solitaire Pets Adventure is in a soft-launch phase.
SciPlay’s social casino games feature slots-style game play and some table games-style products.
Its casual games blend slots-style or bingo game play with adventure game features.
Scientific Games mulls ASX launch
In mid-July, Scientific Games announced a plan to launch on the Australian Securities Exchange.
The company has been in talks with Australian equity capital management teams to gather their thoughts on the idea, which would represent one of the country’s biggest ever non-privatisation initial public offerings.
Scientific Games said it is also considering strategic alternatives for the divestitures for each business, including an IPO, a combination with a special purpose acquisition company or a strategic combination with another business.
Analysts have valued any such ASX listing of the digital gaming company’s lotteries arm, which recently reported earnings before interest, tax, depreciation and amortisation of US$430 million in the past 12 months, at between US$3.44 billion and US$5.16 billion.
Australian bankers are expected to warmly welcome the proposal, which if consummated would see Scientific Games join other ASX-listed gaming firms such as Aristocrat, Tabcorp, Crown Resorts and Star Entertainment Group.
Scientific Games President and chief executive officer Barry Cottle said that the decision to divest “reflects key steps to optimise our portfolio and strengthen our balance sheet by significantly de-levering while also targeting investments in our largest growth opportunities.