In this biggest gambling related acquisition since Amaya Gaming took over PokerStars owner Rational Group earlier this year, it’s been confirmed that Nevada regulators gave Scientific Games the nod to buy out mega slot machine maker Bally Technologies for $5.1 billion. The acquisition gives Scientific Games the most diversified portfolio of products in the global gambling industry.
Scientific Games and Bally Technologies first announced their negotiations of the deal on July 31, 2014. After four months of overwhelmingly positive shareholder talks and just 45 minutes of deliberation by the Nevada Gaming Control Board, state regulators pressed their stamp of approval onto the application Thursday. With clearance to go ahead with the $5.1 billion takeover, Scientific is expected to close the deal as early as today.
Once the buyout is finalized, Scientific Games Corp will officially own the world’s most extensive portfolio of gambling products, having tapped into all of the industry’s most lucrative genres. These include slot machines, lotteries, table games, lottery and casino management systems, and of course, online gambling.
Collectively, Bally Technologies shares are worth $3.3 billion, with the company being $1.8 billion in debt. Scientific agreed to purchase all shares for $83.30 each and assume the slot machine maker’s liability, coming up with a grand total of $5.1 billion. That figure supersedes the $4.9 billion Canadian-based gambling giant, Amaya Gaming. paid to acquire Rational Group, owner of online poker giant PokerStars and Full Tilt, in September.
Shawn Reid, member of the Nevada Gaming Control Board, called the purchase “a straight-forward transaction”. The board has already conducted extensive research into both companies in the last 18 months. In October of 2013, Scientific Games was approved to buyout WMS, while slot machine maker Bally purchased SHFL Entertainment the following month.
Ronald Perelman, who entertains more than 30% of the shares in Scientific Games, played a key role in the closing of last October’s acquisition of WMS, said he never thought he’d be standing in front of Nevada’s regulators just one year later. When the board asked his thoughts on the procurement, 71 year old Perelman said, in a word, “Content”. A respected gambling industrialist listed 32nd on Forbes 400 List of Billionaires, Perelman explained, “These two companies provide a great base to distribute content across a greater platform. That’s what our customers want to see.”
While Scientific Games has secured the highest takeover bid of a giant leader in the slot machine industry in quite some time, that $5.1 billion mark could be outdone in the very near future. There is already a larger deal in the works between Italian lottery business GTECH and another major slot machine manufacturer, International Games Technology (IGT).
GTECH has agreed to purchase IGT for a whopping sum of $6.4 billion, but the transaction is still in the median phase. According to Reuters, shareholders of the American slot machine company held an “extraordinary” meeting to discuss the sale and seek approval. Although preliminary consent has already been received, the gambling company’s acquisition is not expected to close until sometime early next year.