Scientific Games Announces Agreement to Acquire Barcrest Group From International Game TechnologyBy Scientific Games Corporation, PRNE
Tuesday, April 26, 2011
NEW YORK, April 27, 2011 - Scientific Games Corporation (Nasdaq: SGMS) (the "Company") announced
today that it has entered into a definitive agreement to acquire Barcrest
Group Limited ("Barcrest"), a leading supplier of gaming content and machines
in Europe, from International Game Technology (NYSE: IGT) for approximately
33 million pounds Sterling in cash (subject to certain post-closing
adjustments), plus up to approximately 2 million pounds in deferred
consideration, the payment of which is subject to the satisfaction of certain
conditions relating to a third-party contract. The transaction is conditioned
on, among other things, obtaining U.K. competition approvals and certain
third-party consents and is anticipated to close during the third quarter of
2011. Upon closing, Barcrest will be integrated into Scientific Games' gaming
divisions, Global Draw and Games Media.
The acquisition is anticipated to enhance the Company's gaming business
by adding Barcrest's expansive library of gaming titles, which was compiled
over the past 40 years, to Scientific Games' existing content portfolio and
state-of-the-art digital delivery network. The transaction will also extend
the Company's U.K. server-based gaming presence to new betting shop and pub
locations as well as complementary gaming venues, such as bingo halls and
gaming centers. In addition, by acquiring Barcrest, Scientific Games will
gain access to new video lottery customers in Italy and the Czech Republic.
The acquisition will also provide an existing base of business in interactive
gaming, where Barcrest game content is currently available through internet,
mobile and other digital delivery channels.
Based on preliminary results for the fiscal year ended September 30,
2010, Barcrest had operating income and depreciation expense of approximately
5.7 million pounds and 4.2 million pounds, respectively, on revenue of
approximately 45 million pounds.
"This transaction represents a major step forward in strengthening and
expanding our server-based gaming content," said Ian Timmis, Chief Executive
Officer of Global Draw and Games Media. "In addition, it will provide the
opportunity for us to bring the advanced capabilities of our state-of-the-art
gaming systems and operational expertise to new wide area gaming venues, such
as U.K.-based gaming centers and bingo halls, along with venues in Italy and
the Czech Republic."
Lorne Weil, Chairman and Chief Executive Officer of Scientific Games
added, "We have a strong track record of executing value-enhancing
transactions and anticipate the acquisition of Barcrest will continue this
tradition. We believe there are significant benefits that may be achieved by
distributing Barcrest's content across our server-based gaming businesses, as
well as offering games through additional delivery channels, including
internet and mobile."
About Scientific Games
Scientific Games Corporation is a global leader in providing customized,
end-to-end gaming solutions to lottery and gaming organizations worldwide.
Scientific Games' integrated array of products and services include instant
lottery games, lottery gaming systems, terminals and services, and internet
applications, as well as server-based interactive gaming machines and
associated gaming control systems. For more information, please visit our
website at www.scientificgames.com.
International Game Technology (NYSE: IGT) is a global leader in the
design, development and manufacture of gaming machines and systems products,
as well as online and mobile gaming solutions for regulated markets. More
information about IGT is available at www.IGT.com or follow IGT on
Twitter at @IGTNews or Facebook at www.facebook.com/IGT.
In this press release the Company makes "forward-looking statements"
within the meaning of the U.S. Private Securities Litigation Reform Act of
1995. Forward-looking statements describe future expectations, plans, results
or strategies and can often be identified by the use of terminology such as
"may," "will," "estimate," "intend," "continue," "believe," "expect,"
"anticipate," "could," "potential," "opportunity," or similar terminology.
These statements are based upon management's current expectations,
assumptions and estimates and are not guarantees of future results or
performance. Actual results may differ materially from those projected in
these statements due to a variety of risks and uncertainties and other
factors, including, among other things: competition; material adverse changes
in economic and industry conditions; technological change; retention and
renewal of existing contracts and entry into new or revised contracts;
availability and adequacy of cash flows to satisfy obligations and
indebtedness or future needs; protection of intellectual property; security
and integrity of software and systems; laws and government regulation,
including those relating to gaming licenses, permits and operations;
inability to identify, complete and integrate future acquisitions; inability
to complete the proposed acquisition of Barcrest Group Limited; inability to
benefit from, and risks associated with, joint ventures and strategic
investments and relationships; pending legal challenges that may affect our
joint venture's Illinois lottery private management agreement or the failure
of our joint venture to meet the net income targets or otherwise realize the
anticipated benefits under such agreement; seasonality; inability to identify
and capitalize on trends and changes in the lottery and gaming industries;
inability to enhance and develop successful gaming concepts; dependence on
suppliers and manufacturers; liability for product defects; fluctuations in
foreign currency exchange rates and other factors associated with foreign
operations; influence of certain stockholders; dependence on key personnel;
failure to perform on contracts; resolution of pending or future litigation;
labor matters; and stock price volatility. Additional information regarding
risks and uncertainties and other factors that could cause actual results to
differ materially from those contemplated in forward-looking statements is
included from time to time in the Company's filings with the Securities and
Exchange Commission, including under the heading "Risk Factors" in our
periodic reports. Forward-looking statements speak only as of the date they
are made and, except for the Company's ongoing obligations under the U.S.
federal securities laws, the Company undertakes no obligation to publicly
update any forward-looking statements whether as a result of new information,
future events or otherwise.
Company Contact: Cindi Buckwalter, Investor Relations +1-(212)-754-2233
Tags: April 27, Europe, New York, Scientific Games Corporation