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Scientific Games (SGMS) Paying $26/Shr For WMS Industries (WMS) In Gaming Push

 January 31, 2013 08:01 AM
 


(By Balachander) Scientific Games Corp. (NASDAQ: SGMS) has agreed to pay $26.00 a share or roughly $1.5 billion in cash to acquire WMS Industries Inc. (NYSE: WMS), a maker of video gaming machines.

The deal represents a premium of 59 percent to previous closing price of WMS shares, which jumped 55.35 percent in Thursday's premarket trading.

Scientific Games, which offers instant lottery games and lottery gaming systems, expects the acquisition to add to earnings and free cash flow immediately.

[Related -Merger Arbitrage Mondays – June 3, 2013]

"Scientific Games' strong global footprint, including its position in server-based gaming, should help accelerate WMS' international development initiatives," Scientific Games said.

The combination will create a global gaming company with a broad portfolio of products and services for the lottery and gaming industries, Scientific Games said.

Over the trailing 12-month period ended September 30, 2012, the combined companies generated combined revenue of roughly $1.6 billion and combined attributable EBITDA of about $579 million, excluding anticipated synergies.

WMS has a iGaming platform, including social and mobile gaming, while Scientific Games has a platform for iLottery, sports book and loyalty/rewards.

The deal is expected to close by the end of 2013.

On Wednesday, SGMS closed at $8.93, while WMS ended at $16.37.

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