Scientific Games sells lottery business to Brookfield Business Partners in $6bn deal

Scientific Games has formally announced the sale of its lottery division to Brookfield Business Partners after weeks of speculation in a deal that could reach over $6bn.
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Scientific Games has formally announced the sale of its lottery division to Brookfield Business Partners after weeks of speculation in a deal that could reach over $6bn. 

SG said that the sale was necessary to realise its strategic vision and singular focus to be the ‘leading cross-platform global gaming company’. 

Addressing its shareholders, the company noted that the sale will provide an opportunity to ‘unlock’ its shareholder’s value whilst also streamlining its operations. 

Breaking down the deal structure, Brookfield Business Partners will pay $5.825bn in cash upfront as well as a further $225m in earn-out based on several performance metrics including EBITDA in FY2022 and FY2023. 

The sale is expected to be formally ratified and completed by Q2 of 2022, subject to regulatory approval and customary closing conditions. 

“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,” commented Barry Cottle, President and CEO of Scientific Games. 

“We conducted a thorough review of paths to divest the Lottery business and we are confident that this transaction maximizes value and certainty while minimizing complexity and execution risk, and positions both Scientific Games and SG Lottery for continued success along their unique growth trajectories.”

Brookfield has no intention to move the lottery business from its headquarters in metro-Atlanta and many of its global operations are expected to continue as usual. 

Furthermore, SG Lottery has entered an agreement with Scientific Games for the supply of finance, information technology, regulatory compliance, legal, human resources and facilities at cost for an initial term of 12 months.

“The Scientific Games Lottery team has built a leading business, which has innovated its industry, at the convergence of games, technology and services, across retail and digital channels for its global customers,” added David Nowak, Managing Partner, Brookfield Business Partners. “With our capabilities and global reach, we look forward to supporting management in the continued growth of the business.” 

A market leader in instant games, SG Lottery has long-standing relationships with approximately 130 government and non-government lottery entities in over 50 countries.

According to SG, the lottery business makes up 69% of all global instant game sales as well as supplying the entire lottery industry with a range of products such as lottery systems, ilottery and sports betting. 

“We are thrilled with this outcome and what it means for the future of Scientific Games Lottery and our customers,” noted Patrick McHugh, Chief Executive of Scientific Games Lottery. 

“I am confident that, with Brookfield’s support, we will have the flexibility and agility to expand our deep product portfolio to meet our customers’ evolving needs and maximize lottery beneficiary proceeds across the globe, enabling us to capture the significant opportunities we see ahead.”