Scientific Games Corporation has revealed its intention to divest both its lottery and sports betting businesses as it seeks to “target investments towards the largest growth opportunities”.
With the support of its board of directors, including executive chair Jamie Odell and executive vice chair Toni Korsanos, SGC is reported to be evaluating a number of strategic alternatives which will enable it to execute the divestitures for each business.
These alternatives include “an initial public offering or a combination with a special purpose acquisition company, or a sale or a strategic combination with another business”.
Barry Cottle, president and chief executive officer of Scientific Games, said: “Today’s announcement reflects key steps to optimise our portfolio and strengthen our balance sheet by significantly de-levering while also targeting investments in our largest growth opportunities.
“These steps will accelerate our path to become a content-led growth company focused on leading in both land-based and digital markets. Our company will be positioned to build great games that define the future of gaming, supported by platforms that power the best operators in the world.
“We believe these steps will enable us to capitalise on the high growth potential of each of our businesses, including their expanding digital content offerings and platforms, unlocking value for shareholders, customers, and employees. Each of our businesses will be better positioned to partner with their respective customers and to deliver long-term growth and profitability.”
Once the divestments are complete, the new Scientific Games will consist of its gaming, igaming and SciPlay businesses.
Cottle continued: “At the conclusion of this process, the new company will consist of leading gaming, igaming and SciPlay businesses, all of which have great momentum and will collectively deliver great value.
“We will capitalise on the increasing convergence of these businesses, as players look to play their favorite games wherever and whenever they want to play. As the leading cross-platform global game company, we are uniquely positioned to take advantage of the incredible industry transition that is underway.
“Given this significant opportunity, we are targeting our digital businesses to be comparable in size to the land-based gaming business within three years. I’m confident that, with these steps, we are well positioned for future growth prospects.”
Odell added: “When I joined the board in September 2020, I told stakeholders that we were focused on rapidly de-leveraging the balance sheet, unlocking the value of the company’s products and technologies and creating a flexible, nimble company positioned to deliver above-market returns to investors.
“Today, we have announced major initiatives aimed at achieving each of these key objectives, recognising significant value in each of the businesses and positioning the company for sustainable growth, all as a result of the dedicated work of our teams.”
