Light & Wonder has issued an update on the sale of its OpenBet platform to Endeavor Operating Company, LLC and Endeavor Group Holdings, Inc. According to the update, the company has agreed to sell the platform for $400 million less than the original amount after the companies entered into an amendment to their definitive purchase agreement on Thursday.
OpenBet to Now Sell for a Total of $800 Million
Under the revised agreement, Light & Wonder will receive $750 million for the OpenBet platform along with $50 million in Class A common stock. This way the deal will amount to $800 million in gross proceeds, and net proceeds after tax are estimated at $700 million. The deal is account for the current market dynamics and an agreement by Endeavor to waive the closing condition if required.
The deal is supposed to close by the end of the third quarter this year and will still be subject to the customary closing conditions and regulatory approvals. Light & Wonder recently sold its Lottery division and the added sale of the OpenBet platform adds $5.6 billion to the company’s war chest after tax.
Light & Wonder CEO and president Barry Cottle reaffirmed the company’s commitment to selling off the platform, touting Endeavor’s own prominent profile in the gaming and gambling industry:
“Endeavor is the right partner for OpenBet and the amended agreement increases speed and certainty by creating a simplified path to closing the transaction, while unlocking substantial benefits for OpenBet and Light & Wonder.”Light & Wonder CEO and President Barry Cottle
OpenBet is already showing strong results in the specific markets targeted by Endeavor, which will add more value to the business, argues Cottle. Meanwhile, Light & Wonder will focus on de-levering the company balance sheet and achieve what it wants to be Targeted Net Debt Leverage Ratio of 2.5x to 3.5x.
Light & Wonder Closer to Securing Ultimate Goal
The sale and amended agreement are one of the final steps toward achieving the goal of streamlining Light & Wonder and ensuring that the company remains one of the leading cross-platform global game companies.
“Our enhanced financial flexibility will enable us to accelerate the return of significant capital to shareholders through our share repurchase program, while also investing in key growth initiatives,” Cottle concluded.
Endeavor is also receiving a valuable asset as OpenBet is touted as one of the go-to options when it comes to sports content, technology, and services with a global pull and leverage.