Scientific Games and Bally Technologies $5.1 Billion Merger

Scientific Games and Bally Technologies MergerA lot has been happening in the gaming-technology manufacturer space as things heat up. Shortly after Italy-based Gtech agreed to purchase Las Vegas-based IGT for $4.7 billion in July this year, the second large gaming technology merger occurred last week.

Gaming solutions provider Scientific Games and leading rival slot machine manufacturer Bally Technologies have completed the transaction for the merger on Friday after Nevada gaming regulators signed off on the $5.1 billion deal on Thursday.

Both mergers will create two largest gaming technology giants as they become an even larger provider of gaming systems to the global market. The deal between Scientific Games and Bally is worth around $5.1 billion, with the company reportedly raising $2 billion to make the merger happen. The acquisition also includes the refinancing of $1.8 billion in existing Bally’s debt.

Las Vegas-based Bally Technologies will now become a wholly owned subsidiary of New York-based Scientific Games, the largest provider of lottery systems. The merger, which was finalized in just four months, creates a new entity that offers a broad range of gaming-related products, including slot machines, casino table games, casino and lottery management systems and interactive games.

Scientific Games acquired slot machine manufacturer WMS Industries in a deal worth $1.5 billion in January of last year. That same year, Bally purchased SHFL Entertainment, a table gaming casino provider in a deal worth about $1.3 billion. All four companies are now under the one brand of the Scientific Games Corporation.

In addition to announcing the completion of the merger, Scientific Games also made the announcement about its new executive leadership team, with three individuals appointed to oversee operations for the gaming, lottery and interactive gaming divisions of the new company.

Alongside President and Chief Executive Officer, Gavin Isaacs, will be Derik Mooberry, who will oversee the Gaming unit. James Kennedy is the Group Chief Executive of Lottery, and Jordan Levin will be in charge of the Interactive division, taking on the role as president.

The senior management team comprises executives with years of experience in the gaming, lottery and interactive gaming industries. All of them had been great team leaders in previous roles from Scientific Games, Bally, SHFL Entertainment and WMS Industries. CEO Gavin Isaacs also has more than 15 years experience in senior positions at three different gaming companies.

When asked about the merger, Gavin Isaacs, remarked “We are excited by the opportunities that will be created by combining each organisation’s core strengths in developing engaging gaming entertainment products, advanced technologies and systems, and providing value-added services to help our customers grow their revenues.

As a result of the merger the new company is expected to generate more than $3 billion in total annual revenue and expect to reduce annual operating expenses by $235 million. The Scientific Games CEO hopes that much of the cost savings will occur in the first year of operations. Isaacs also mentioned the merged company will have 8,300 employees worldwide and hinted at the fact that its main company headquarters will move from Atlanta to Nevada.

The merger will allow the company to invest in more advanced gaming technologies so that it can more effectively compete against Gtech and International Game Technology (IGT). Scientific Games is gambling on the fact that its greater size and scale made possible from the merger will allow them to gain some momentum that will continue to drive the company forward in what is admittedly an ever increasing competitive space with more and more casino gaming companies gaining a presence on the Internet.