SciPlay to Become Wholly Owned Subsidiary of Scientific Games
Scientific Games (NASDAQ: SGMS) is seeking to acquire the remaining share of its social gaming division SciPlay Corporation (NASDAQ: SCPL). The deal, if approved, will have an enterprise value of $1.9 billion.
According to the proposal, Scientific Games (SGMS) will acquire the remaining 19% equity interest in the developer that it does not already own. It would be an all-stock transaction that would make SciPlay a wholly-owned subsidiary.
SciPlay became an independent business trading on the NASDAQ Stock Exchange in 2019, prior to which it was the social division of SGMS.
The terms of the proposal would see SciPlay shareholders receive 0.250 shares of SGMS common stock for each share of SciPlay Class A common stock that they own. However, at present, the proposal is simply an expression of interest.
This proposed transaction is another important step forward on the strategy Scientific Games recently announced to become a content-led growth company with a particular focus on digital markets and unlock the value of the company’s products and technologies. SciPlay fits perfectly into Scientific Games’ focus on building engaging content and launching great games more fully cross-platform.
If the proposal is accepted, then it would speed up SGMS’s aim of becoming a leading cross-platform global game supplier. It would enable the company to integrate SciPlay and make use of its game content, mechanics, and new game development roadmap. This would give SGMS the opportunity to provide players with a unified and enhanced experience both online and in land-based institutions.
Furthermore, being part of a larger company with more financial resources would allow SciPlay to speed up its expansion within the casual gaming market.
In a letter to SciPlay’s board, the SGMS board said that the merger of the two companies would “deliver significant operational, strategic and financial benefits and drive shareholder value in excess of what each company could generate on a standalone basis.”