Market Overview

Scientific Games Announces $5.1 Billion Deal At $720 Million Market Cap

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Shares of Bally Technologies (NYSE: BYI) were halted prior to a $5.1 billion acquisition offer from Scientific Games (NASDAQ: SGMS).

Under the current terms of the deal, Bally shareholders will receive $83.30 per share, 38 percent higher than Bally Technologies' previous close. The combined company expects to save $245 million annually: $220 million in annual cost savings and $25 million in reduced capital expenditures.

Interestingly, Scientific Games’ market cap is just $720 million, indicating a private equity fund is likely to step in and provide financing.

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Scientific Games CEO Gavin Isaacs commented on accretion from the transaction, “In addition to the strategic value of the transaction to our customers, we expect to create significant shareholder value as the transaction is expected to deliver immediate earnings and cash flow accretion and will allow us to meaningfully reduce our leverage over the next three to four years.”

Shares of Bally are trading 35 percent higher to $81.27, 2.5 percent below the acquisition offer. This suggests traders are not expecting another offer, as has been the case in several recent high-profile deals.

Scientific Games shares are flat; the deal will be done in cash, reducing the threat of dilution.

 

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