Scientific Games Corp, The Las Vegas-based slot machine maker, announced that it would sell its global lottery division for $6.05 billion to Brookfield Business Partners LP.
The lottery division works with over 50 countries and 130 government and nongovernment lottery entities across the globe.
Brookfield Business Partners LP. is a Brookfield Asset Management Inc. subsidiary and has operations in Hamilton, Bermuda. The company will pay $5.8 billion in cash and additional payments of up to $225 million based on profitability targets in 2022 and 2023.
About $2.6 billion of the payment will be in equity, with 30% raised through existing funds and the rest gained from partners.
Las Vegas and the state of Nevada’s economy was hit hard in the pandemic, with gambling revenue plummeting by $6 billion in 2020. That affected Scientific Games’ revenue.
The Vegas company has been trimming down its portfolio after it announced that it reached $8.2 billion in net debt as of June 30th. Since then, the company has started to work on reducing that debt.
Last month, it sold its sports betting division to Endeavor Group Holding Inc., the UFC owners, for $1.2 billion. At the same time, sports betting and gambling is expanding in the US.
The latest deal with Brookfield will significantly reduce Scientific Games’ leverage. In addition, the company’s shares are up by over 17% since the announcement of divestment plans.
The deal is expected to close in the second quarter of 2022.
