Scientific Games announced on Wednesday, October 27, it would sell its global lottery business to Canadian investment company Brookfield for US$6.05 billion, reported Reuters.
The Las Vegas-based slot machine maker has been trimming down its business after ratcheting up US$8.2 billion in net debt as of June 30. Last month, it sold its sports betting division, OpenBet, to Endeavor Group for US$1.2 billion in cash and stock.
The deal with the flagship unit of Brookfield Asset Management will consist of about US$5.83 billion in cash and an additional payment of up to US$225 million based on meeting certain profitability targets in 2022 and 2023.
Reuters had earlier reported that the company was in talks to potentially list the lottery business in Australia, but those plans will now be shelved because of the deal.
Scientific Games had a net debt leverage ratio, an important gauge of a company’s financial health, of 7.2 times at the end of June, down from 10.5 times at the beginning of the year.
Analysts from Jefferies wrote in a note that they saw the “outcome incrementally favorably,” as the company would get 100% of the net proceeds at closing, and expected leverage to come down imminently.
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