Scientific Games Corp. has entered into a definitive agreement to sell the lottery business on which the company was founded to Brookfield Business Partners for a total consideration of $6.05 billion.
It is the second and final divestment in the plan, announced last summer by company President and CEO Barry Cottle, to shed the company’s lottery and sports betting businesses to concentrate on its core business of providing content to both land-based and online casinos. In September, the company entered into a definitive agreement to sell its sports betting business, OpenBet, to Endeavor Group Holdings, in a cash and stock transaction valued at $1.2 billion.
Under the agreement, Brookfield and its institutional investors will pay $5.825 billion in cash for the lottery business, and an earn-out of up to $225 million based on the achievement of certain EBITDA targets in 2022 and 2023. The transaction is expected to close in the second quarter of 2022, subject to applicable regulatory approvals and customary closing conditions.
Scientific Games was founded in Alpharetta, Georgia in 1973 to supply state and provincial lotteries in North America. The company, originally part of parimutuel supplier Autotote, introduced the first instant lottery ticket in 1974. Today, it supplies 130 government and non-government lotteries in more than 50 countries across the world with tickets, systems and other lottery services.
SG’s lottery division provides a suite of turnkey solutions covering the entire lottery ecosystem, including instant and terminal-generated lottery games, sports betting, lottery systems and retail technology and the fast-growing iLottery market. The lottery business is the market leader in instant games with a broad array of products and services powering approximately 69 percent of instant product retail sales globally.
“This transaction is transformative in accelerating the delivery of our stated strategy to optimize our portfolio, aggressively de-lever our balance sheet and position us to invest in future growth,” said Cottle in a statement.
SG Lottery will remain headquartered in Alpharetta, in the metro-Atlanta area, with operations expected to continue around the world.
SG Lottery has entered into a transitional services agreement with Scientific Games Corporation whereby Scientific Games will provide SG Lottery certain finance, information technology, regulatory compliance, legal, human resources and facilities at cost for an initial term of 12 months.
Scientific Games had been in discussions with Apollo Global Management as well as Brookfield in its search for suitors interested in buying the SG lottery business, which had been valued at up to $7.5 billion.