Light & Wonder Enters into Amended Purchase Agreement for the Sale of OpenBet to Endeavor

Final Step to Streamline Portfolio and Become the Leading Cross-Platform Global Game Company

Facilitates Path to Further De-Lever and Achieve Targeted Net Debt Leverage Ratio(1) Range of 2.5x to 3.5x

Simplifies Path to Close and Modifies Valuation

Generates Approximately $5.6 billion in Total Net After-Tax Proceeds from the Sale of Lottery and OpenBet Businesses

LAS VEGAS – June 30, 2022 – Light & Wonder, Inc. (NASDAQ: LNW), formerly known as Scientific Games Corporation (“Light & Wonder” or the “Company”), today announced that it has entered into an amendment to its definitive purchase agreement with Endeavor Operating Company, LLC and Endeavor Group Holdings, Inc. (NYSE: EDR) (collectively, “Endeavor”), a global sports and entertainment company, related to the sale of its Sports Betting business, OpenBet.

Under the terms of the amended purchase agreement, Light & Wonder will receive $750 million in cash and $50 million in Class A common stock of Endeavor Group Holdings, Inc., based on the volume weighted average price of such stock in the twenty days before the date of the amendment, or total gross proceeds of $800 million and estimated total net after-tax proceeds of approximately $700 million. The amended purchase agreement provides a strong valuation in the current market and also increases the speed and certainty of closing by modifying the conditions for closing, including Endeavor’s agreement to waive the closing condition requiring regulatory approval by the Nevada Gaming Control Board, if required. Under the revised terms, the transaction is anticipated to close by the end of the third quarter of 2022, subject to the remaining applicable regulatory approvals and customary closing conditions. The recently completed Lottery sale and the pending sale of OpenBet will cumulatively generate approximately $5.6 billion of estimated net after-tax proceeds.

“Endeavor is the right partner for OpenBet and the amended agreement increases speed and certainty by creating a simplified path to closing the transaction, while unlocking substantial benefits for OpenBet and Light & Wonder,” said Barry Cottle, President and Chief Executive Officer of Light & Wonder. “OpenBet demonstrates continued momentum across their key markets and the amended terms of the transaction provide strong value for the business. The significant cash consideration from the OpenBet sale will enable us to further de-lever our balance sheet and achieve our Targeted Net Debt Leverage Ratio (1) range of 2.5x to 3.5x.”

“This transaction is the final step in our journey to streamline our organization as we deliver on our promises as the leading cross-platform global game company. The cumulative proceeds from our divestitures, as well as our double digit growth profile and $1.4 billion 2025 Targeted Consolidated AEBITDA(1) resulting in strong cash flow generation, is expected to create tremendous value for our shareholders. Our enhanced financial flexibility will enable us to accelerate the return of significant capital to shareholders through our share repurchase program, while also investing in key growth initiatives.”

OpenBet is one of the world's leading global online sports betting technology companies, offering an ecosystem of sports content, technology and services to the largest operators around the world. It is a leading business-to-business sports betting partner in the U.S., U.K., Australia and Canada, with a strong position in Europe and APAC. To date, OpenBet has over 75 global customers, including 46 sports books across 12 states and a 100% uptime record across major sporting events.

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(1) Represents a non-GAAP financial measure. Additional information on this non-GAAP financial measure is available at the end of this release.

 

About Light & Wonder, Inc.
Light & Wonder, Inc. (formerly known as Scientific Games Corporation), is the global leader in cross-platform games and entertainment. Light & Wonder brings together approximately 6,000 employees from six continents to connect content between land-based and digital channels with unmatched technology and distribution. Guided by a culture that values daring teamwork and creativity, the Company builds new worlds of play, developing game experiences loved by players around the globe. Its OpenGaming™ platform powers the largest digital-gaming network in the industry. The Company is committed to the highest standards of integrity, from promoting player responsibility to implementing sustainable practices. To learn more, visit lnw.com.

Media Inquiries: media@lnw.com


Forward-Looking Statements
In this press release, Light & Wonder makes "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as "will," "may," and "should." These statements are based upon management's current expectations, assumptions and estimates and are not guarantees of timing, future results, or performance. Therefore, you should not rely on any of these forward-looking statements as predictions of future events. Actual results may differ materially from those contemplated in these statements due to a variety of risks, uncertainties and other factors, including those factors described in Light & Wonder’s filings with the Securities and Exchange Commission (the “SEC”), including its current reports on Form 8-K, quarterly reports on Form 10-Q and its annual report on Form 10-K that was filed with the SEC on March 1, 2022 (including under the headings "Forward-Looking Statements" and "Risk Factors"). Forward-looking statements speak only as of the date they are made and, except for Light & Wonder’s ongoing obligations under the U.S. federal securities laws, Light & Wonder undertakes no obligation to publicly update any forward-looking statements whether as a result of new information, future events or otherwise.

Date: 06/30/2022

Category: Corporate

Type: Release