Light & Wonder has officially completed the sale of its Scientific Games Lottery business to Brookfield Business Partners, with the company hailing the transaction as a “major milestone”.
After previously announcing the planned sale in October 2021, the deal has now been finalised for $5.8bn in gross cash proceeds and approximately $5bn of net after-tax cash proceeds.
Following completion of the sale, Light & Wonder has announced its first priority is “debt reduction to a target net debt leverage ratio range of 2.5x to 3.5x”.
Secondly, the company is in the process of repurchasing shares in order to return substantial capital to shareholders.
Lastly, there is a focus on “disciplined investment in key growth opportunities”, where the firm will prioritise its capital for buy-backs, debt reduction and organic investments.
Barry Cottle, Chief Executive Officer of Light & Wonder, commented: “The lottery business sale closing is a significant step towards streamlining our portfolio and strengthening our balance sheet as we execute on our strategy to transform our business with a singular focus on building great games and franchises to entertain our players wherever and whenever they want to play.
“The convergence of land-based and digital continues to gain momentum and we are strongly positioned to be a leader in the industry.
“With the completion of the lottery business sale and the upcoming sale of our sports betting business, we are moving rapidly as we execute on our vision to be a leading cross-platform global game provider and unlock the full potential of Light & Wonder. This also positions the lottery business for success as a stand-alone company completely focused on innovating for its global lottery customers.”
Last month, Light & Wonder announced a rebrand away from its former trading name of ‘Scientific Games’, though the lottery business will maintain the latter’s name as it acts as a stand-alone company with a singular focus on its lottery customers.
“The proceeds from this transaction and our strong cash profile allow us to accelerate progress on our capital allocation strategy,” added Connie James, Chief Financial Officer at Light & Wonder.
“We now have the financial flexibility and balance sheet integrity that, combined with our double-digit growth profile and high mix of digital and recurring revenues, give us a tremendous opportunity to continue to drive shareholder value.”