CasinoCityTimes.com

Gurus
News
Newsletter
Author Home Author Archives Author Books Send to a Friend Search Articles Subscribe
Stay informed with the
NEW Casino City Times newsletter!
Newsletter Signup
Stay informed with the
NEW Casino City Times newsletter!
Related Links
Related News
Recent Articles
Best of Howard Stutz

Gaming Guru

Howard Stutz
 

Scientific Games says Bally Technologies deal is on track

3 November 2014

LAS VEGAS -- Scientific Games Corporation executives have assured the investment community the company’s $5.1 billion buyout of Bally Technologies, Inc. is on track to close by the end of the year.

During the lottery giant’s third-quarter earnings call Thursday, CEO Gavin Isaacs said the company has the ability to fund the purchase. In two weeks, Scientific Games will initiate a debt offering that it hopes will give the New York-based company the last piece of the funds needed to complete a deal for the gaming industry’s largest supplier.

In a Securities and Exchange Commission filing last month, Scientific Games said it raised $2 billion for the transaction.

“Management still expects to close the Bally deal by year’s end regardless of whether or not the remaining acquisition related debt is funded via a high yield offering or taken on by the current bank syndicate,” Eilers Research founder Todd Eilers told investors.

Scientific Games and Bally announced the transaction in July. Scientific Games is paying $83.30 per share to acquire all outstanding shares of Las Vegas-based Bally, valued at $3.3 billion. The lottery company is also assuming $1.8 billion in debt.

On the conference call, Isaacs said acquisition would increase cash flow and reduce obligations taken on by the deal.

“Our goal is to primarily use our increased free cash flow to pay down debt and bring our leverage ratios back to more optimal levels,” Isaacs said.

Bloomberg News this week reported that JPMorgan, Bank of America and Deutsche Bank, which have marketed $2 billion of term loans for the Scientific Games, failed to gather interest for a $3.2 billion bridge loan for the transaction.

Scientific Games Chief Financial Officer Scott Schweinfurth said both companies accelerated their SEC filings to ensure information was made public. Both companies are in a better position to head back to the financial market, he added.

Bally shareholders are scheduled to vote on the merger Nov. 18. The transaction also needs approval of Nevada gaming regulators.

Stifel Nicolaus Capital Markets gaming analyst Steven Wieczynski said the comments from management “should bury any concerns over the potential for the deal to fall apart based on a lack of financing.”

Last year, Scientific Games acquired slot machine maker WMS Industries for $1.5 billion.

Isaacs told analysts the deal came about quickly after a few weeks of talks between Scientific Games and Bally.

“If you have a great idea in the synergies and meeting of the minds and then strategies all align, why is there any reason to procrastinate,” Isaacs said.
Scientific Games says Bally Technologies deal is on track is republished from Online.CasinoCity.com.