- Legal States
Jerome García July 16, 2021 3 min read
SG Announces Plans to Acquire SciPlay Public Shares
Scientific Games sent a letter to SciPlay’s Board of Directors, proposing to acquire the public shares of the company it currently doesn’t own. SG revealed that SciPlay fits perfectly with the company’s strategic growth plan and predicts that the merger will bring benefits for shareholders.
Scientific Games Aims At Acquiring SciPlay Public Shares
Scientific Games, the global leader in the gaming and lottery industries, announced Thursday that it plans to acquire the SciPlay public shares it doesn’t already have in its possession. SG revealed that it has sent a letter to SciPlay’s Board of Directors, proposing to acquire the remaining 19% equity interest in the company. With that in mind, if the all-stock transaction is completed, SciPlay would become SG’s wholly-owned subsidiary.
“SciPlay fits perfectly into Scientific Games’ focus on building engaging content and launching great games more fully cross-platform.“Scientific Games
SG explained in a statement that the proposal is a key step forward in its strategic plan to become a “content-led growth company with a particular focus on digital markets.” Furthermore, the operator revealed that the transaction will help unlock the value of products and technology. Last but not least, SG said that SciPlay fits perfectly into the company’s plan of creating engaging game content.
What Did SG Offer SciPlay?
In its letter to the Board of Directors, SG proposed SciPlay shareholders different than SG and its subsidiaries to receive 0.250 shares of common company stock for each share of SciPlay Class A common stock they own. SG explained that this implies an “enterprise value of $1.9 billion and purchase multiple of 2021E consensus EBITDA of 10.1x and 2022E consensus EBITDA of 9.4x.“
SG revealed that the proposal implies a “premium of 11% based on the SG and SciPlay respective closing stock prices” as of the close of business day on July 14, which is the last trading day before the proposal was made. Additionally, SG said that a premium of 10% is based on “the thirty-day volume weighted average price (VWAP) for SciPlay Class A common stock.“
SciPlay SG Merger Deal to Bring Benefits
Considering its existing collaboration with SciPlay, SG said that it expects to have a seamless transaction. The company acknowledged that it is looking forward to joining forces with the talented management team and employees at SciPlay.
Focusing on benefits from the SG – SciPlay merger, SG said that it expects the transaction to result in financial, operational and strategic benefits. Furthermore, the company said that the merger may also boost “shareholder value in excess of what each company could generate on a standalone basis.” Last but not least, SG outlined that it believes that SciPlay public shareholders may benefit from increased trading liquidity.