Light & Wonder Friday completed the previously announced sale of OpenBet, its sports sport betting business, to Endeavor Group Holdings. The price is for total gross proceeds of approximately $800 million, consisting of $750 million in cash, subject to certain customary adjustments, and 2,305,794 shares of Class A common stock of Endeavor.
The transaction marks the final step of Light & Wonder’s strategic plan, announced in June 2021, to streamline and transform the company. The sale also positions OpenBet to build on its track record of innovation as part of Endeavor.
“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,” said Light & Wonder interim CEO Matt Wilson in a statement. “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. I want to thank our teams for their hard work and dedication to ensure a quick and successful completion of this important transaction. Endeavor is the right partner for OpenBet and we wish our OpenBet colleagues all the best on this exciting new chapter.”
Wilson added that the completion of the sale means that Light & Wonder has delivered on a priority to transform its balance sheet in order to achieve a Targeted Net Debt Leverage Ratio range of 2.5x to 3.5x.
“We have created an opportunity to generate significant excess capital,” Wilson said. “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.”
In a statement, Jefferies Equity Analyst David Katz said the sale marks the latest transformation for Light & Wonder, and reflects the amended terms announced in June 2022.
“Although the gross proceeds are lower than when the deal was originally consummated, our positive stance remains as the net leverage of 2.5X-3.5X should gain traction with the Street,” Katz wrote. “We believe the focus now shifts to growth in digital gaming, market share gains in land-based gaming and, most notably, share repurchases.”