Light & Wonder has agreed to a $400m reduction in the divestment price of OpenBet, with Endeavor Group now set to pay a total of $800m.
This will see the former Scientific Games receive $750m in cash and $50m in class A common stock of Endeavor, which is down from $1bn in cash and $200m in stock that was detailed in September 2021.
The amended fee, which L&W says represents a “final step” to a streamlined portfolio, is reported as providing “a strong valuation in the current market” and increases the speed and certainty of closing.
This includes an agreement by Endeavor to waive the closing condition requiring regulatory approval by the Nevada Gaming Control Board, if required.
“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 range of 2.5x to 3.5x.”
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 divestment of OpenBet will cumulatively generate approximately $5.6bn of estimated net after-tax proceeds.
“This transaction is the final step in our journey to streamline our organisation as we deliver on our promises as the leading cross-platform global game company,” Cottle added.
“The cumulative proceeds from our divestitures, as well as our double digit growth profile and $1.4bn 2025 targeted consolidated AEBITDA 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.”