(Reuters) - Scientific Games Corp (SGMS.O), which makes tickets and software for lotteries, said it would acquire rival WMS Industries Inc (WMS.N) for about $1.42 billion to beef up its gaming machines business.
Scientific Games will pay $26.00 for each WMS common share, a 59 percent premium to the stock’s closing price of $16.37 on the New York Stock Exchange on Wednesday.
WMS shares rose 54 percent to $25.25 in premarket trade on Thursday.
The deal, which includes debt of $85 million and cash on hand of $55 million, will immediately add to earnings per share and free cash flow, Scientific Games said.
WMS Industries, which competes with Bally Technologies Inc BYI.N, manufactures and distributes games, video and mechanical reel-spinning gaming machines and video lottery terminals.
BofA Merrill Lynch and Credit Suisse Securities LLC advised Scientific Games on the deal, while Cleary Gottlieb Steen & Hamilton LLP was the legal adviser.
Macquarie Capital advised WMS on the deal.
Scientific Games shares closed at $8.93 on the Nasdaq on Wednesday.
Reporting by Chris Peters in Bangalore; Editing by Sriraj Kalluvila