The deal includes an initial $5.83bn in cash and an earn-out of up to $225m, based on the business achieving certain earnings before interest, tax, depreciation and amortisation targets in 2022 and 2023.
Scientific Games’ lottery business works with approximately 130 government and non-government lottery entities in over 50 countries around the world, providing turn-key solutions including instant and terminal-generated lottery games, sports betting, lottery systems and retail technology and online lottery market.
According to Scientific Games, the lottery business powers approximately 69% of instant product retail sales globally.
“This transaction is transformative in accelerating the delivery of our stated strategy to optimise our portfolio, aggressively de-lever our balance sheet and position us to invest in future growth,” Scientific Games’ president and chief executive Barry Cottle said.
“We conducted a thorough review of paths to divest the Lottery business and we are confident that this transaction maximises value and certainty while minimising complexity and execution risk, and positions both Scientific Games and SG Lottery for continued success along their unique growth trajectories.
“The significant near-term proceeds from this transaction as well as our previously announced sale of Sports Betting will transform our balance sheet and provide the financial flexibility to invest organically and inorganically to accelerate our strategies.
“This marks a major milestone and puts us on a clear path to achieve our vision to become the leading cross-platform global game company and unlock our full value for shareholders.”
Brookfield Business Partners’ managing partner David Nowak added: “The Scientific Games Lottery team has built a leading business, which has innovated its industry, at the convergence of games, technology and services, across retail and digital channels for its global customers.
“With our capabilities and global reach, we look forward to supporting management in the continued growth of the business.”
Subject to regulatory approvals and customary closing conditions, the deal is expected to close during the second quarter of 2022.
Scientific Games first announced plans to divest its lottery business in June this year, in an effort to position the company for “sustainable growth”.
Last month, Scientific Games said the division was set to break $1bn in revenue this year, having contributed $266m towards the group’s total revenue of $880m in the second quarter.