Establishes Scientific Games as a Top Provider of iGaming and
iLottery through Combination of Industry-Leading Content Portfolio
with Premier Digital Platform and Distribution Network
Adds #1 Global Sports Betting Platform to Scientific Games'
Portfolio
Accretive to Earnings and Cash Flow in First Year
LAS VEGAS and TORONTO, Sept. 20,
2017 /CNW/ -- Scientific Games Corporation (Nasdaq:
SGMS) ("Scientific Games") and NYX Gaming Group Limited (TSXV: NYX)
("NYX") today announced that they have entered into a definitive
agreement (the "Arrangement Agreement") under which Scientific
Games will acquire NYX, further strengthening Scientific Games'
leadership position and ability to provide the broadest portfolio
of content, technologies and digital products and services for its
global Gaming and Lottery customers. Under the terms of the
transaction, Scientific Games will acquire all of the outstanding
ordinary shares of NYX for CAD$2.40
per share, equivalent to an enterprise value of approximately
CAD$775 million, or approximately
US$631 million.
Strategic Benefits
- Creates Global Digital Gaming and Lottery Powerhouse –
Together, Scientific Games, a world leader offering customers a
fully integrated portfolio of technology platforms, robust systems,
engaging content and services, and NYX, one of the fastest growing
B2B real-money digital gaming and sports betting platforms in the
world, will form an industry-leading force across iGaming, iLottery
and Sports.
- Adds #1 Global Sports Betting Platform to Scientific Games'
Strong Portfolio – Scientific Games will now be perfectly
positioned to capitalize on future regulatory developments in
real-money wagering and sports betting by adding NYX's
industry-leading OpenBet Sportsbook. NYX's digital Sportsbook can
be seamlessly delivered throughout Scientific Games' global gaming
and lottery networks in existing and future regulated U.S. and
global markets.
- Accelerates Growth of Scientific Games Interactive Business
– NYX's worldwide channels, markets and customer base offer new
growth opportunities to build on the significant momentum of
Scientific Games' existing interactive gaming business.
- Strengthens and Supports Growth of NYX's Business – NYX
has significant stand-alone strategic momentum, an industry-leading
suite of products, a growing global customer base and is the
leading digital casino and account platform in North America. The acquisition will add
significant new intellectual property, expertise and global reach
to NYX, one of the world's leading digital gaming content and
technology companies.
- Transaction Accretive to Earnings and Cash Flow in First
Year
"This important transaction creates a global gaming and lottery
powerhouse. Scientific Games will be a stronger industry leader
offering one of the broadest end-to-end portfolios of engaging
content, innovative technologies and digital products and services
across gaming and lottery," said Kevin
Sheehan, Scientific Games' President and Chief Executive
Officer. "This strategic and financially compelling acquisition
combines NYX's premier digital gaming and sports betting platforms
and expansive distribution network to our own global,
industry-leading content, technologies and digital products and
services. NYX ideally positions us to capitalize on the growing
online gaming and sports betting markets."
"Scientific Games' acquisition of NYX will provide immediate and
compelling cash value for our shareholders, expand the products and
solutions we are collectively able to offer our customers and
accelerate the execution of our long-term strategic plan," said
Matt Davey, Chief Executive Officer
of NYX. "We will now have scale, content and product
development capabilities, complementary global infrastructure and
access to an expanded customer base. We believe Scientific Games is
the ideal partner for NYX, and we look forward to working alongside
the talented Scientific Games team."
Transaction Terms and Details
The transaction will be financed with cash on hand and
debt. It represents a 112 percent premium to NYX's closing
stock price on September 19, 2017;
and the transaction is expected to be accretive to earnings and
cash flow in the first year and leverage neutral at closing.
The Arrangement Agreement provides for the acquisition of the
shares of NYX by way of a statutory scheme of arrangement under
Guernsey Law, NYX's jurisdiction of incorporation, and is subject
to court approval and the approval of (i) a majority in number of
NYX shareholders voting, either in person or by proxy, representing
at least 75% in value of the outstanding NYX ordinary shares; and
(ii) a simple majority of the votes cast by the holders of NYX
ordinary shares, excluding those shares held by certain interested
shareholders. The transaction, which was approved by each company's
board of directors, is expected to close in the first quarter of
2018, subject to the satisfaction of certain conditions, including
NYX shareholder approval, approval by the Royal Court of Guernsey
and receipt of gaming approvals in certain jurisdictions. NYX's
shareholder meeting and court hearing are currently anticipated to
occur in the fourth quarter of 2017.
In making its determination, the board of directors of NYX
considered, among other factors, fairness opinions (the "Fairness
Opinions"), subject to the assumptions and limitations therein,
from each of Lazard Frères & Co. LLC ("Lazard") and Macquarie
Capital Markets Canada Ltd. ("Macquarie Capital") to the effect
that the price per share of CAD$2.40
to be received by NYX shareholders pursuant to the transaction is
fair, from a financial point of view, to the shareholders.
In connection with the transaction, certain shareholders who
together hold in the aggregate approximately 18.4 million (or 17.0
percent) of NYX's fully diluted shares, have entered into voting
support agreements pursuant to which they have agreed to vote all
of their shares in favor of the transaction. This includes Mr.
Davey, who holds approximately 12.8 million of the fully diluted
shares, or 11.8 percent.
The Arrangement Agreement contains customary deal protections in
favor of Scientific Games, including a termination fee payable by
NYX in certain circumstances.
Management
It is expected that upon completion of the transaction,
Matt Davey, currently Chief
Executive Officer of NYX, will oversee a newly created Digital
Gaming and Sports division at Scientific Games, working with the
leadership of NYX and SG Interactive, including Leigh Nissim, Managing Director, B2B Interactive
of Scientific Games. Matt Davey will
report to Kevin Sheehan, Chief
Executive Officer and President of Scientific Games.
Financial and Legal Advisory
Deutsche Bank Securities Inc. served as financial advisor to
Scientific Games, and Cravath, Swaine & Moore LLP, McMillan LLP
and Appleby (Guernsey) LLP served as legal advisors to Scientific
Games.
Lazard and Macquarie Capital served as joint-lead financial
advisors to NYX, and Latham & Watkins LLP, Carey Olsen LLP and
Stikeman Elliott LLP served as legal advisors to NYX.
Information Circular and NYX Shareholders Meeting
A management information circular of NYX will be prepared and
mailed to NYX's shareholders over the coming weeks in advance of
the special meeting to vote on the scheme of arrangement, providing
shareholders with important information about the transaction and
including copies of the Arrangement Agreement, the support
agreements and the Fairness Opinions and certain related documents.
Details of the transaction, as well as the rationale for the
support of the transaction by NYX's board of directors, will be set
out in the circular and will be filed with the Canadian securities
regulators and available on SEDAR at www.sedar.com.
About Scientific Games
Scientific Games Corporation (NASDAQ: SGMS) is a global leader
in technology-based gaming systems, table games, table products and
instant games and a leader in products, services and content for
gaming, lottery and interactive gaming markets. Scientific Games
delivers what customers and players value most: trusted security,
creative content, operating efficiencies and innovative technology.
Today, Scientific Games offers customers a fully integrated
portfolio of technology platforms, robust systems, engaging content
and unrivaled professional services. For more information, please
visit www.scientificgames.com.
About NYX
NYX Gaming Group Limited (TSXV: NYX) is a leading digital gaming
provider, headquartered in Las
Vegas, USA, with a staff of
more than 1,000 employees globally, including more than 600
engineers.
NYX delivers value by adhering to the highest standards of
customer service, probity and responsibility. It has one of the
broadest distribution bases in the industry, with more than 200
unique customers.
The award-winning NYX OGS™ (Open Gaming System), which allows
licensees to leverage the best-of-breed, multi-vendor casino
content from around the world, is acknowledged to be the industry's
market-leading gaming offering. From its own studios and a broad
partner network of the most innovative third party suppliers, NYX
offers customers the widest portfolio of content available, with
access to more than 2,000 game titles, via OGS™.
In addition, NYX's award winning sports betting division OpenBet
is utilized and trusted by leading sports book operators, with its
scale and performance world-renowned. In 2016, the OpenBet
Sportsbook processed more than two billion bets and broke new
records at the 2017 Grand National, where it processed 68,000 peak
bets-per-minute.
NYX Gaming Group Limited is listed on the TSX Venture Exchange
under the symbol TSXV: NYX.
Company Contacts
Investor
Relations:
Scientific Games: Michael Quartieri +1 702-532-7658
Executive Vice President and Chief Financial Officer
NYX: Dennis Fong +1
416-283-9930
Investor Relations
investor.relations@nyxgg.com
Media Relations:
Scientific Games: Susan Cartwright +1 702-532-7981
Vice President, Corporate Communications
susan.cartwright@scientificgames.com
NYX: Huw Thomas +1
702-816-0415
Group Chief Strategy and Marketing Officer
huw.thomas@nyxgg.com
© 2017 Scientific Games Corporation. All Rights Reserved. All ®
notices signify marks registered in the
United States.
Forward-Looking Statements
This press release includes "forward-looking statements" and
"forward-looking information" (collectively "forward looking
statements") within the meaning of the U.S. Private Securities
Litigation Reform Act of 1995 and Canadian securities laws.
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," "plan,"
"continue," "believe," "expect," "anticipate," "estimate,"
"should," "could," "potential," "opportunity," or similar
terminology. These statements are based upon management's
current expectations, beliefs, assumptions and estimates and are
not guarantees of timing, future results or performance.
Similarly, statements herein that describe the proposed
transaction, including its financial impact, and other statements
of management's expectations, beliefs, assumptions, estimates and
goals regarding the proposed transaction are forward-looking
statements. It is uncertain whether any of the events or
results anticipated by the forward-looking statements (including
consummation of the proposed transaction) will transpire or occur,
or if any of them do, what impact they will have on the results of
operations and financial condition of the combined company or the
price of Scientific Games' stock. These forward-looking
statements involve certain risks and uncertainties and other
factors that could cause actual results to differ materially from
those indicated in such forward-looking statements, including but
not limited to: uncertainties as to the timing of the consummation
of the proposed transaction and the ability of the parties to
consummate the proposed transaction; the satisfaction of the
conditions precedent to consummation of the proposed transaction,
including the approval of NYX's shareholders and the approval of
the Royal Court of Guernsey; the ability to obtain required
regulatory and gaming approvals at all or in a timely manner; the
ability to obtain the debt financing necessary to consummate the
proposed transaction; potential litigation related to the proposed
transaction; disruption of NYX's or Scientific Games' current plans
and operations as a result of the proposed transaction; the ability
of NYX or Scientific Games to retain and hire key personnel;
competitive responses to the proposed transaction; unexpected
costs, charges or expenses resulting from the proposed transaction;
the ability of Scientific Games to successfully integrate NYX's
operations, product lines and technology; the diversion of
management's attention from Scientific Games' and NYX's ongoing
business operations; the ability of Scientific Games to implement
its plans, forecasts and other expectations with respect to NYX's
business after the completion of the transaction and realize
additional opportunities for growth and innovation; potential
adverse effects due to foregoing opportunities that Scientific
Games might otherwise pursue absent the pendency of the proposed
transaction; the ability of Scientific Games to realize the
anticipated synergies from the proposed transaction in the
anticipated amounts or within the anticipated timeframes or costs
expectations or at all; the ability to maintain relationships
with Scientific Games' and NYX's respective employees, customers,
other business partners and governmental authorities; and the other
risks, uncertainties and important factors contained and identified
(including under the heading "Risk Factors") in Scientific Games'
filings with the Securities and Exchange Commission (the "SEC"),
such as its Quarterly Reports on Form 10-Q, Annual Reports on Form
10-K and Current Reports on Form 8-K, and NYX's filings with
Canadian securities regulators, any of which could cause actual
results to differ materially from the forward-looking statements.
The forward-looking statements included in this press release are
made only as of the date hereof and neither Scientific Games nor
NYX undertakes any obligation to update any forward-looking
statements whether as a result of new information, future events or
otherwise. NYX is responsible for the information in this press
release concerning NYX and Scientific Games is responsible for the
information in this release concerning Scientific Games. To the
maximum extent permitted by law, none of Scientific Games, its
directors, employees or agents accepts any liability for any loss
arising from the use of NYX information contained in this
communication. Readers are cautioned not to place undue reliance on
any of these forward-looking statements.
Additional Information and Where to Find It
This communication is being made in respect of the proposed
transaction involving NYX and Scientific Games. NYX intends to file
with Canadian securities regulators via SEDAR (www.sedar.com) a
management information circular and certain related materials in
connection with the proposed transaction with Scientific Games. The
information circular will be sent or given to the shareholders of
NYX and will contain important information about the proposed
transaction and related matters. NYX GAMING GROUP'S SECURITY
HOLDERS ARE URGED TO READ THE INFORMATION CIRCULAR REGARDING THE
PROPOSED TRANSACTION AND ANY OTHER RELEVANT DOCUMENTS CAREFULLY AND
IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED
TRANSACTION.
In addition, security holders of NYX will be able to obtain free
copies of the information circular from NYX by contacting
Dennis Fong, NYX's Investor
Relations representative, by phone at (647) 797-3376 or email at
investor.relations@nyxgg.com.
NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES
PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX
VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR
ACCURACY OF THIS RELEASE.
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SOURCE Scientific Games Corporation; NYX Gaming Group
Limited