Scientific Games, operating under its new corporate name Light & Wonder, said Tuesday (Asia time) that it has completed the sale of its lottery business for US$5.8 billion in gross cash proceeds.
The sale is seen as a significant milestone for the company as it looks to pay down US$8.2 billion in debt following a recent strategic review into the company’s operations. Scientific Games also agreed to sell off its sports betting business last year for US$1.2 billion.
Light & Wonder explained that the sale was significant for both entities with the lottery business now positioned to accelerate its growth as a stand-alone company with a singular focus on its lottery customers.
Likewise, with the net proceeds from the sale of the Lottery Business, Light & Wonder is “executing a balanced and opportunistic approach to capital allocation,” it said.
The company added that it plans to pay down around US$5 billion in debt from the proceeds, reducing debt to US$3.2 billion with net debt leverage of 3.9x. The company is targeting net debt leverage in the range of 2.5x to 3.5x once the sale of its sports betting business is complete in 3Q22.
Other priorities will be following through on a three-year, US$750 million share repurchase program, and “disciplined investment in key growth opportunities.”
CEO Barry Cottle said, “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.”