Light & Wonder, Inc. · ASX:LNW
Light & Wonder — Scientific Games — Merger or Acquisition (January 2013)
24 slides from Light & Wonder's merger presentation, Jan 31, 2013
Slide 1: Acquisition of WMS
Acquisition of January 31, 2013
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements describe future expectations, plans, results or strategies and can often be i
Slide 3: Today's Presenters
Today’s Presenters Lorne Weil – Chairman & CEO Jeff Lipkin – Senior Vice President & CFO
Slide 4: A Transformational Transaction
A Transformational Transaction Combines leading companies in lottery instant tickets, systems, gaming machines and interactive gaming to create a comprehensive scope of product and service offerings for the lottery and gaming industries 3
Slide 5: Strategic Rationale and Opportunities
Strategic Rationale and Opportunities Diversifies revenue base, expands margins and propels future growth opportunities Broadens scope of product offerings and creates cross-selling opportunities Shared and complementary core competencies Award-winning game development Global footprint Extensive lic
Slide 6: Transaction Overview
Transaction Overview Per Share Consideration $26.00 in cash per WMS share Transaction Value $1.5 billion, based on $85 million of debt and $55 million of cash on hand at 9/30/12 Valuation 6.0x LTM 9/30/12 Adjusted EBITDA(1), excluding anticipated synergies 4.4x LTM 9/30/12 Adjusted EBITDA(1), includ
Slide 7: Scientific Games company profile
6 Global leader in over $70 billion worldwide instant ticket category (1) Instant ticket supplier to 41 U.S. jurisdictions and experience selling into over 50 countries Largest portfolio of licensed brands for lotteries Leader in value chain management services for lotteries Leader in lottery loyalt
Slide 8: WMS Profile
7 Product Sales Second largest machine supplier as measured by ship share (1) Broad range of video and mechanical reel gaming machines Serves Class III, Class II and video lottery terminal sectors Social, casual and mobile gaming (SoCaMo) Deploys WMS branded game content across interactive channels
Slide 9: Combined Company
Combined Company Creates one of the largest B2B and B2G global gaming suppliers with LTM 9/30/12 combined: Revenue of ~$1.6 billion Combined Attributable EBITDA(1) of ~$579 million, excluding ~$90 million of anticipated synergies Worldwide leader in lottery & gaming hardware and software Global inst
Slide 10: Shared and Complementary Core Competencies
Shared and Complementary Core Competencies Game Development Brand Licensing Loyalty Programs 9 Hardware Software Development Systems Design & Development Manufacturing & Engineering Customer Service Field Maintenance Supply Chain Interactive Gaming Government Relations & Government Procurement Acqui
Slide 11: Full Suite of Interactive Content & Solutions
Full Suite of Interactive Content & Solutions 10 Products Scientific Games Williams Interactive Pro Forma Company Electronic Instant Tickets ü ü Draw Games ü ü Slots ü ü ü Sports Betting ü ü Social Games ü ü Video Poker ü ü Casino Games ü ü Multi-Player Games ü ü Subscriptions ü ü Player Loyalty ü ü
Slide 12: WMS is Well Positioned in an Industry Poised for Growth
WMS is Well Positioned in an Industry Poised for Growth 11 North American unit sales (1) Source: Company reports & EILERS-FANTINI Quarterly Slot Report. Note: North American market defined as U.S. and Canada. Includes Class II, Class III and VLTs. (1) Estimates based on Wall Street Research. Slot re
Slide 13: Revenue Growth Opportunities Through Cross-Selling
Revenue Growth Opportunities Through Cross-Selling 12 Capitalize on WMS and SGMS content creation capabilities across multiple markets, channels and platforms Accelerate WMS’ international growth by utilizing SGMS’ global footprint Expand WMS participation in government gaming by capitalizing on SGM
Slide 14: Combined Revenue Mix
Combined Revenue Mix Scientific Games WMS Combined LTM 9/30/12 Revenue: $930 LTM 9/30/12 Revenue: $693 LTM 9/30/12 Revenue: $1,623 13 ($ in millions)
Slide 15: Combined Financials
Combined Financials 14 Revenue (1) Combined Attributable EBITDA (2) (includes anticipated synergies) (1) Revenue (excluding Racing Business), which excludes the revenue of Scientific Games’ Racing Business that was sold in October 2010, is a non-GAAP financial measure that is presented herein as a s
Slide 16: Integration Strategy and Anticipated Synergies
Integration Strategy and Anticipated Synergies Extensive prior acquisition integration experience Integration Strategy Integration will be driven by teams composed of WMS and SGMS leadership 6 to 9 months to create a comprehensive plan for rapid and efficient integration Opportunity for rapid realiz
Slide 17: Combined Leverage
Combined Leverage As of 9/30/12 16 (1) Combined Attributable EBITDA reflects the arithmetic sum of Scientific Games’ Attributable EBITDA (see footnote on page 8 of this presentation) and WMS’ Adjusted EBITDA (see footnote on page 5 of this presentation) for the trailing 12-month period ended Septemb
Slide 18: Strategically and Financially Compelling Transaction
Strategically and Financially Compelling Transaction 17
Slide 19: Additional Information
Additional Information 18 Additional Information and Where to Find It WMS intends to file with the SEC a proxy statement in connection with the proposed transaction with Scientific Games. The definitive proxy statement will be sent or given to the stockholders of WMS and will contain important infor
Slide 20: Appendix
Appendix 19
Slide 21: EBITDA Reconciliation
EBITDA Reconciliation 20 ($ in millions) Three Months Ended LTM 12/31/11 3/31/12 6/30/12 9/30/12 9/30/12 Reconciliation to Scientific Games Attributable EBITDA: Net Income (Loss) ($8.5) $1.8 ($12.6) ($27.1) ($46.4) Income Tax Expense 3.1 4.9 3.3 5.1 16.3 Depreciation and Amortization Expense 30.7 30
Slide 22: EBITDA Reconciliation (cont'd)
EBITDA Reconciliation (cont’d) 21 ($ in millions) Three Months Ended LTM 12/31/11 3/31/12 6/30/12 9/30/12 9/30/12 Attributable EBITDA $80.3 $86.7 $83.5 $82.5 $333.1 EBITDA from Equity Investments: Earnings from Equity Investments $1.9 $8.8 $6.9 $5.7 $23.4 Income Tax Expense 2.2 3.8 3.0 2.5 11.4 Depr
Slide 23: Reconciliation of Revenue Excluding Racing Business for SGMS
Reconciliation of Revenue Excluding Racing Business for SGMS 22 Revenue Excluding Racing Business (1) Scientific Games Corporation and Subsidiaries. ($ in millions) Fiscal Year Ended December 31, 9 Months Ended 9/30 LTM 2009 2010 2011 2011 2012 9/30/12 SGC Total (1) $927.7 $882.5 $878.7 $639.6 $691.
Slide 24: Reconciliation of Adjusted EBITDA of WMS
Reconciliation of Adjusted EBITDA of WMS 23 Adjusted EBITDA (1) Includes non-cash impairment and restructuring charges. Note: Adjusted EBITDA is a non-GAAP financial measure that is presented herein as a supplemental disclosure. ($ in millions) Fiscal Year Ended June 30, 3 Months Ended 9/30, LTM 201
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