Online gambling supplier Light & Wonder completed the previously announced sale of its sports betting business, OpenBet, to Endeavor Group Holdings for nearly $800 million.
According to the agreement, Endeavor is to pay $750 million in cash, subject to certain customary adjustments, and 2,305,794 shares of Class A common stock, approximately worth $50 million.
Light & Wonder announced the completion of the sale on Sept 30.
OpenBet officially part of online gambling company Endeavor
As part of Light & Wonder’s strategic plan previously announced in June 2021, this move marks the final step to streamline the organization and transform the company.
It comes after Light & Wonder’s sale of its lottery business to Brookfield Business Partners for $5.8bn in April 2022.
The company’s latest move will enable OpenBet to build on its exceptional track record of innovation as part of Endeavor.
As Matt Wilson, interim CEO of Light & Wonder said via press release:
“With the completion of the OpenBet divestiture and our now streamlined organization, Light & Wonder is well positioned to execute on our growth strategy with a singular focus on building great games fully cross-platform. With our R&D engine and world class talent at our core, we have an unparalleled ability to leverage our leading industry positions, evergreen franchises and unmatched platforms to drive sustainable differentiation and significant value.”
He also thanked his colleagues for their hard work and dedication to guarantee the quick and successful completion of this significant transaction.
“Endeavor is the right partner for OpenBet, and we wish our OpenBet colleagues all the best on this exciting new chapter.”
Achieving targeted net debt leverage ratio
Light & Wonder has quickly delivered on key commitments, including strengthening the balance sheet and positioning the firm to unlock great value as the leading cross-platform games supplier.
As Wilson explained:
“Importantly, with the completion of this sale, we have delivered on our key priority to transform our balance sheet, with a clear path to achieving our Targeted Net Debt Leverage Ratio(1) range of 2.5x to 3.5x. With our high mix of recurring and digital revenues, double-digit growth profile, $1.4 billion of 2025 Targeted Consolidated AEBITDA(1) and strong cash flow, we have created an opportunity to generate significant excess capital.
Our enhanced financial flexibility accelerates our ability to return substantial capital to shareholders through our share repurchase program, while also pursuing our key growth initiatives, enabling us to unlock tremendous shareholder value going forward.”
Focusing on casino vertical
Before spring 2022, Light & Wonder was still known as Scientific Games, a global gaming giant developing new games and omnichannel experiences for online and retail casinos and sports betting sites. It also featured a lottery division.
Light & Wonder officially changed its name and stock ticker symbol from Scientific Games while revealing a greater focus on online gambling. The rebranding completion came after Scientific Games sold its lottery and sports betting businesses to Brookfield Business Partners and bought live casino studios to shift its focus on the casino vertical.
In November 2021, Scientific Games acquired Authentic Gaming, a premium live casino solutions provider, marking the company’s first foray into the live casino market. A month later, Scientific Games acquired Swedish ELK Studios to enhance its original content offerings and production capabilities while aiming to grow its presence in digital markets.