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WMS Industries Soars on Scientific Games Buyout

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Shares of WMS Industries (NYSE: WMS) are soaring on Thursday after the company agreed to be bought by Scientific Games (NASDAQ: SGMS).

At last check, WMS had surged around 51.50 percent and was trading at $24.81. Shares of Scientific Games were last up around six percent to $9.44 after opening the day above $10.00.

Scientific Games is purchasing WMS Industries for $26 per share, which is a 59 percent premium to the stock's closing price on Wednesday. Both companies boards have unanimously approved the transaction.

WMS Industries is an Illinois-based supplier of video and mechanical reel-spinning gaming machines and video lottery terminals. Scientific Games is a global supplier to to lottery and gaming organizations worldwide.

The company's products and services include instant lottery games, lottery gaming systems, terminals and services, and Internet applications, as well as server-based interactive gaming machines and associated gaming control systems.

On a conference call, Scientific Games' Chairman and CEO Lorne Weill said that the transaction creates "a huge opportunity for revenue synergy and to market and sell each others products and to create new products." Weill added that "we are very complementary."

Scientific Games, in which billionaire Ron Perelman has a 38 percent stake, is paying around seven times WMS's earnings before interest, taxes, depreciation and amortization, according to Bloomberg. This compares to a median EBITDA multiple of around 8.6 times for similar deals.

Weill said that the deal is expected to be completed by the end of the year and produce annual savings of around $90 million. Competitors International Game Technology (NYSE: IGT) and Bally Technologies (NYSE: BYI) were both also higher on the day. IGT had gained a little better than 2 percent while BYI was up more than 5 percent.

Posted-In: Lorne WeillEarnings News Guidance Management M&A Intraday Update Movers

 

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