Scientific Games buys Bally Technologies

[The Buzz]

Scientific Games is buying Bally Technologies for $3.3 billion. It is also assuming the $1.8 billion in debt Bally's is carrying. The merger creates a massive lottery and gaming supplier company. And the deal comes on the heels of GTech buying IGT to create the largest supplier of casino and lottery technology. In 2013, Bally's bought SHFL Entertainment (formerly ShuffleMaster) while Scientific Games bought WMS (which makes land-based and online slots). Scientific Gaming CEO Gavin Isaacs was the CEO of SHFL during the Bally's acquisition. Scientific Games, which now includes SHFL, Bally's and WMS, should prove to be a formidable competitor for GTech -- which now owns IGT.

http://americasmarkets.usatoday.com/...n-merger-news/

[The Buzz]

Someone close to Buzzy happens to be chummy with Scientific Games CEO Gavin Isaacs. Here's the letter Isaacs sent out about today's acquisition. Someone is going to have remind him that his counting skills need some work.

To WMS Customers and Casino Operators:

Today marks another major step forward in our journey to become a pre-eminent supplier of great gaming content, value-adding services and world-class systems technology to keep your players engaged, improve your casino’s productivity and help grow your revenues in the years ahead.
We strive to be your partner of choice. In addition to WMS’ legendary culture for creating innovative great games, we continue to seek out new avenues that would further advance our core competencies for game creation, while enabling us to provide you with a full end-to-end suite of solutions, from content to systems to enhanced service capabilities. In support of that strategic direction, earlier today we announced that Scientific Games Corporation (“Scientific Games”) has entered into a definitive agreement to acquire Bally Technologies, Inc. (“Bally”) for $83.30 in cash per common share, with a total transaction value of approximately $5.1 billion in total cash consideration. We have obtained committed financing from our banks for this transaction. The boards of directors of Scientific Games and Bally have unanimously approved the transaction. As discussed below, the transaction is subject to a number of closing conditions and there can be no assurance that the transaction will be completed. A copy of the press release is attached.
You probably now wonder how this merger can benefit you. Let me be more specific:
If completed, we believe the merger would create a gaming and lottery supplier with a full suite of solutions, including great gaming content, value-adding services and world-class systems technology to keep players engaged, improve casino productivity and grow player revenues. We expect that it will benefit customers like you in the following way:
1) Content The expansion of our game development resources and capabilities would lead to significant new game development; and we will continue to support your past and continued investments in both WMS and Bally products and services. We also believe that our greater size and scope, including cross-channel distribution opportunities, would improve our attractiveness to third-party brand licensors, and as a result, our customers would have an even richer assortment of player appealing games and programs to choose from.
1) Technologies The merger would combine two of the world’s finest systems technology companies. Bally’s is a leader in state-of-the-art gaming systems and Scientific Games is a leader in world-class lottery systems. We expect that combining our systems resources would facilitate the creation of innovative new systems that would provide enhanced benefits for our customers and your casino’s players.
The combined company would utilize the extensive skills and expertise of our talented worldwide workforce to become more customer-centric. My previous experiences at both Bally and SHFL entertainment (which was previously acquired by Bally), as well as my current experience at Scientific Games, render me uniquely qualified to appreciate the tremendous talent within these organizations. As a result, I could not be more excited at the opportunities that this combination would unleash. Our collective portfolios of intellectual property, including licensed and proprietary brands, would expand our portfolio of great products and drive expanded growth opportunities in the land-based, iGaming and iLottery channels. Increased scale would also enable the combined company to capitalize on new long-term growth opportunities by continuously developing and driving game content across multiple platforms and distribution channels.
The Road Forward

As a valued customer of Scientific Games and Bally, you should expect that our service, responsiveness and attention to your needs will not diminish as a result of the transaction. Our sales, service and technicians will continue to fully support you through this period, as well as any integration period that would follow consummation of the transaction.
The transaction is subject to approval by Bally’s stockholders, antitrust clearance and gaming regulatory approvals, as well as other customary closing conditions. Upon consummation of the transaction, Bally would become a wholly owned subsidiary of Scientific Games.
I strongly believe the combination of Scientific Games and Bally would strengthen our relationship with you by providing us with the full suite of solutions that would make us a better strategic partner. I am excited about the next chapter in our storied history and what our combined company will contribute to our tremendous industry.
Kindest regards,

Gavin Isaacs