Benzinga | Jul 15, 2021 07:03AM EDT

Scientific Games Submits Proposal To Acquire Public Shares of SciPlay

Scientific Games Corporation (NASDAQ:SGMS) (the "Company" or "Scientific Games") today announced that it has submitted to the Board of Directors of SciPlay Corporation (NASDAQ:SCPL) ("SciPlay") a proposal for Scientific Games to acquire the remaining 19% equity interest in SciPlay that it does not currently own in an all-stock transaction, following which SciPlay would become a wholly-owned subsidiary of Scientific Games (the "Proposed Transaction").

This Proposed Transaction is another important step forward on the strategy Scientific Games recently announced to become a content-led growth company with a particular focus on digital markets and unlock the value of the Company's products and technologies. SciPlay fits perfectly into Scientific Games' focus on building engaging content and launching great games more fully cross-platform.

Scientific Games expects the transaction to be immediately accretive to the value of the Company's shares offering SciPlay shareholders a premium for their investment and the opportunity to participate in the upside potential of Scientific Games as it transforms its portfolio and executes on its strategy to drive long-term sustainable growth and significant shareholder value.

Scientific Games has delivered its proposal to SciPlay's Board of Directors. The full text of the letter sent to SciPlay's Board of Directors is below:

July 15, 2021

VIA EMAIL:

Board of Directors

SciPlay Corporation

6601 Bermuda Road

Las Vegas, NV 89119

Dear Members of the Board:

Scientific Games Corporation ("we" or "SGMS") is pleased to propose a merger with SciPlay Corporation ("SciPlay") pursuant to which SciPlay's shareholders, other than SGMS and its subsidiaries, would become direct shareholders of SGMS in a tax-free transaction (the "Transaction"). In the Transaction, SciPlay shareholders, other than SGMS and its subsidiaries, would receive 0.250 shares of SGMS common stock for each share of SciPlay Class A common stock they own, which would imply an enterprise value of $1.9 billion and purchase multiple of 2021E consensus EBITDA of 10.1x and 2022E consensus EBITDA of 9.4x. The Transaction implies a premium of 11% based on the SGMS and SciPlay respective closing stock prices as of the close of business on July 14, 2021, the last trading day prior to the proposal, and a premium of 10% based on the thirty-day volume weighted average price ("VWAP") for SciPlay Class A common stock.

We believe a merger of SGMS and SciPlay will deliver significant operational, strategic and financial benefits and drive shareholder value in excess of what each company could generate on a standalone basis. Further, we believe SciPlay public shareholders will benefit from increased trading liquidity as a result of being part of a pro forma entity with a market capitalization of $7.0 billion (based on the closing share prices of SGMS and SciPlay on July 14, 2021) and a public float that would be approximately 18x larger than SciPlay today.

Through our existing collaboration with SciPlay, we believe a transaction would be seamless and we look forward to fully joining forces with SciPlay's talented leadership team and employees to continue innovating on behalf of customers and players.