Scientific Games Corporation has announced the sale of its sports betting business OpenBet to global sports and entertainment company Endeavor Group Holdings, Inc for US$1.2 billion.
The cash and stock transaction, which is expected to close in 2Q22, will see Scientific Games receive US$1 billion in cash and US$200 million in Endeavor shares based on the volume-weighted average trading price for the 20 trading days ending 24 September 2021.
News of the sale comes after Scientific Games in June unveiled plans to divest its lottery and sports betting businesses in order to deleverage and provide the resources to further invest in digital. The company had said it is considering strategic alternatives for the divestitures for each business, including an initial public offering, combination with a special purpose acquisition company (SPAC) or a strategic combination with another business.
OpenBet, which offers sports betting technology to operators in North America, Europe and Asia-Pacific, currently has over 75 global customers, including 24 sports books across 12 states in the US.
“This transaction represents the culmination of a thorough process to divest OpenBet in order to maximize value for our shareholders and rapidly advance our vision to become the leading cross-platform global game company,” said Scientific Games President and CEO, Barry Cottle.
“The transaction is a significant milestone towards optimizing our portfolio and de-levering the balance sheet to enhance our financial flexibility. It will position us to invest both organically and inorganically in key growth areas, particularly in content and digital markets.
“We are delivering on our promises and executing on our strategy to transform our company and unlock significant value for employees, customers and shareholders.”