Brookfield’s PE arm to buy Scientific Games Lottery for $5.8bn

Brookfield Business Partners has agreed to acquire the lottery services and technology business of Las Vegas-based slot machine maker Scientific Games Corp.

Brookfield Business Partners has agreed to acquire the lottery services and technology business of Las Vegas-based slot machine maker Scientific Games Corp. The purchase price is about $5.8 billion. The deal, expected to close in Q2 2022, will be funded with about $2.6 billion of equity, Brookfield said. Financing will be led by Barclays, Deutsche Bank Securities, BNP Paribas, Credit Agricole Corporate and Investment Bank, Macquarie Capital, RBC Capital Markets and others.

PRESS RELEASE

BROOKFIELD, NEWS, Oct. 27, 2021 (GLOBE NEWSWIRE) — Brookfield Business Partners L.P. (NYSE:BBU) (TSX:BBU.UN) (“Brookfield Business Partners”) together with institutional partners (collectively “Brookfield”) today announced an agreement to acquire Scientific Games Corporation’s global lottery services and technology business (“Scientific Games Lottery” or “the Business”) for approximately $5.8 billion.

With innovative capabilities in game design, production, distribution, systems and terminals, and turnkey technology solutions, Scientific Games Lottery has long-term relationships with approximately 130 lottery entities in over 50 countries. The Business is deeply integrated across the lottery ecosystem as an essential service provider to global lottery programs which represent a critical and growing source of funding for governments around the world.

“We are pleased to continue to grow our business with the acquisition of a market leader and essential service provider to governments around the world,” said David Nowak, Managing Partner, Brookfield Business Partners. “We look forward to partnering with management and bringing our global scale and capabilities to support Scientific Games Lottery’s future growth.”

Investment Highlights
Strong market position. Scientific Games Lottery is a market leader supplying products, services and technology to leading lotteries around the world. The breadth of its product offering, scale and differentiated service offerings contribute to long-standing partnerships with its customer base.

Durable financial performance. The Business operates in a resilient industry, with favorable margins and low ongoing capital requirements. Its recurring revenue base is driven by a clear value proposition, strong customer relationships and contracts with high renewal rates.

Favorable market dynamics. Scientific Games Lottery is well positioned to meet strict regulatory frameworks and oversight which require high standards of service and security.
Opportunities for growth. The Business has access to multiple levers to drive future revenue growth, including expansion of service offerings to existing customers, participation in expected digital growth and new customer acquisition.

Brookfield’s investment will be funded with approximately $2.6 billion of equity.
Brookfield Business Partners intends to fund approximately 30% of the equity on closing from existing liquidity on-hand and capital which will be raised from internal initiatives currently underway. Brookfield Business Partners also recently increased the availability on its credit facilities by $500 million to maintain a strong corporate liquidity position.
The balance of the equity investment is expected to be funded by institutional partners. Prior to or following closing, a portion of Brookfield Business Partners’ commitment may be syndicated to other institutional investors.

Transaction Process
Closing of the transaction remains subject to customary closing conditions including regulatory approvals. Closing is expected in the second quarter of 2022.

Advisors
Financing will be led by a syndicate of banks including Barclays, Deutsche Bank Securities, BNP Paribas, Credit Agricole Corporate and Investment Bank, Macquarie Capital and RBC Capital Markets. Cleary Gottlieb Steen & Hamilton LLP is acting as legal advisor to Brookfield.

Brookfield Business Partners is a business services and industrials company focused on owning and operating high-quality businesses that benefit from barriers to entry and/or low production costs.

Brookfield Business Partners is the flagship listed business services and industrials company of Brookfield Asset Management, a leading global alternative asset manager with over $625 billion of assets under management. More information is available at www.brookfield.com.

Brookfield Business Partners is listed on the New York and Toronto stock exchanges. For more important information, please visit our website at https://bbu.brookfield.com.