With an aim to reinforce its traction in gaming business machines and expand its geographical presence, Scientific Games Corp. (NASDAQ: SGMS
) announced on Thursday that it agreed to acquire WMS Industries Inc. (NYSE: WMS
) in deal estimated at $1.42 billion.
- Scientific Industries will pay $26 per share to acquire WMS Industries
- The transaction represents a premium of 59% over WMS shares’ closing price of $16.37 as on Wednesday on the NYSE
- Both companies' boards have unanimously approved the deal, and it expected close by the year-end, subject to an approval from WMS’s shareholders
Following the announcement, shares of WMS Industries rallied
Scientific Industries, which develops lottery instant tickets, lottery and video gaming systems , said that the deal includes $85 million worth debt and cash on hand estimated at $55 million as of September 30.
WMS Industries, which competes with Bally Technologies Inc., manufactures and distributes gaming machines and interactive gaming content.
Commenting over the proposed deal, A. Lorne Weil, Chief Executive of Scientific said in a statement, “The acquisition of WMS is transformational for Scientific Games, enabling us to offer a complete portfolio of lottery and gaming products and services to both new and existing customers around the world”.
“We expect to combine our game content, technology, operational capabilities and respective geographic footprints to create an enterprise poised to capitalize on significant growth opportunities around the globe,” added Lorne.
Scientific also said that planned acquisition will bring in synergies through shared costs, economy of scale, stronger revenue growth. Besides, the Company said that it will seek opportunities to cross-sell products to each company’s respective customers.