Light & Wonder, the leading content provider and developer, powering the growing online gambling industry, released its latest financial results. On Thursday, the company unveiled details regarding its financial performance for the third quarter of 2023. In Q3 2023, Light & Wonder posted strong growth, marking the tenth consecutive quarter for the company with an increase in revenue. Moreover, Q3 marked the fifth consecutive quarter with double-digit growth year-over-year, the latest unaudited report reveals.

Overall, Light & Wonder’s consolidated revenue in Q3 this year increased by 13% year-over-year. The company confirmed that during the recent trading period, it advanced multiple long-term financial targets, propelling the expansion of its business. Not unexpectedly, Light & Wonder’s iGaming and SciPlay revenues soared again, posting record revenues for fifth consecutive quarter.

A breakdown provided by the company reveals that its iGaming revenue hit a record $70 million in Q3 this year. Compared to the corresponding period last year, an increase of 21% is observed, primarily driven by “growth both in the US and international markets,” explained Light & Wonder.

On the other hand, SciPlay enjoyed another strong quarter with revenues up 15% year-over-year to $196 million. According to Light & Wonder, the strong revenue resulted from increased market share and expansion of its social casino business.

Similarly, the company’s gaming revenue increased as well. Judging by the recent figures, Light & Wonder’s gaming revenue hit $465 million in Q3 this year, up by 11% year-over-year. The global gaming company explained that the increase in gaming revenue is the result of an uptick in machine sales for North America and Australia along with a strong performance of table products across North America.

The Company Completed Multiple Strategic Achievements

During the third quarter, Light & Wonder returned some $112 million of capital to shareholders. This was achieved through share repurchases, the company explained. After Q3, in October, Light & Wonder also confirmed it finalized the acquisition of SciPlay. At the time, the gaming company confirmed it acquired the outstanding 17% equity interest in SciPlay it didn’t already own. The closing of this acquisition, Light & Wonder deemed “another critical strategic milestone.”

“Our tremendous team at Light & Wonder continues to deliver exceptional results with double-digit growth across all three of our businesses for the fourth consecutive quarter.“

Matt Wilson, president and CEO of Light & Wonder

Matt Wilson, Light & Wonder’s president and CEO, praised the company’s team of experts for their efforts that resulted in another stellar quarter. He highlighted the closed acquisition of SciPlay as well as the ASX 200 index in Australia as two important achievements during the period. Finally, Wilson predicted that the company will retain positive momentum throughout 2023 and beyond.

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Light & Wonder, a manufacturer of gambling products, announced that it has signed a definitive agreement to acquire the remaining 17% equity interest in SciPlay that it doesn’t currently own. The two parties agreed on a price of $22.95 per share in all-cash transactions.

The move secured the approval of the board of directors of Light & Wonder, allowing it to finalize the arrangement. SciPlay’s board also approved the transaction, as advised by a special committee comprised of SciPlay’s independent directors. The committee, backed by financial and legal advisors, determined that the deal was in SciPlay’s best interest, advising the board to greenlight the transaction.

The announcement also added that the arrangement has secured the written consent of the common stock holders of SciPlay, ensuring that no additional shareholder approval is required.

The transaction should close in Q4 of 2023 and is still subject to customary closing conditions. After that, SciPlay will officially become a wholly-owned subsidiary of Light & Wonder.

The Deal Will Generate Shareholder Value

Matt Wilson, Light & Wonder’s president and chief executive officer, shared his excitement about the new deal. He said that the acquisition will bolster his company’s cross-platform strategy and will create “an even stronger and more efficient platform for growth.”

Wilson added that the companies’ combined balance sheets will provide the two parties’ teams with the flexibility they need to make further investments in the development and launch of cross-platform games. This, in turn, will generate more value for shareholders, the CEO argued.

We look forward to bringing our world-class teams together and are excited to innovate and grow as one unified company for the benefit of our employees, players and shareholders.

Matt Wilson, president & CEO, Light & Wonder

At the same time, SciPlay’s independent directors Gerald Cohen and April Henry, who also serve as co-chairs of the SciPlay Special Committee, shared a statement on the agreement. They called the transaction a “compelling opportunity” to generate value for SciPlay’s shareholders while also bringing benefits to Light & Wonder.

Our committee conducted a careful evaluation of Light & Wonder’s proposal, with the support of independent financial and legal advisors, and we believe this combination represents the best outcome for SciPlay shareholders.

Gerald Cohen and April Henry, independent directors, SciPlay

Light & Wonder, meanwhile, recently posted its inaugural ESG report, highlighting its efforts to leave a positive mark on the industry.

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The global gaming supplier that creates systems, content, and hardware connecting iconic titles across all channels has sent the proposal to the board of directors governing its social casino arm SciPlay Corporation. 

Provided the proposal will be received and accepted, SciPay would turn into Light & Wonder’s wholly-owned subsidiary. 

$20 per Share in an All-Cash Transaction

The acquisition proposal that Light & Wonder was “pleased to propose” mentions a possible merger that would see SciPlay’s shareholders, different from Light & Wonder and its subsidiaries, receiving $20 in cash per share for every SciPlay Class A common stock owned. 

This would lead to an enterprise value of $2.1 billion for the online casino arm as well as a premium of 28.5% determined on their closing stock price recorded on May 17, 2023, which was the last day of trading prior to the proposal being officially made. 

Should Light & Wonder manage to successfully acquire the remaining 17% equity interest that, at the moment, it does not own, it would pay a total of $422 million. The offer is regarded by Light & Wonder as a way of bringing its businesses together by merging their balance sheets.

At the same time, the company expects the transaction to trigger a “seamless collaboration with SciPlay” that would add more momentum to its cross-platform strategy which is always well-developed.

If it would be given the green light, the acquisition would offer more flexibility for investing cash across the enterprise, thus generating more value for shareholders. At the start of March, the company announced it recorded a 17% consolidated revenue growth for the year, which was expected to assist it with its growth plans. 

A similar Acquisition Proposal in 2021, Rejected 

The current proposal comes after the company, which is fully committed to its responsible corporate efforts, made a similar effort to acquire the rest of the outstanding shares in SciPlay in 2021. 

The proposal was withdrawn in December of that year because it met resistance from the same board of directors that is not left pondering the decision.

At the moment, Light & Wonder owns around 83% of SciPlay’s economic interest and 98% of its voting interest. 

Light & Wonder’s chief executive officer Matt Wilson explained that SciPlay’s public shareholders would benefit from a “compelling” mix of certainty, speed, and premium value. 

Wilson also explained that the company does not expect the consummation of the transaction to ask for any approvals from regulators or shareholders, in an attempt to significantly simplify and speed up the transaction. 

Light & Wonder also used the letter sent to SciPlay Corporation’s board of directors to explain that, in their capacity as a shareholder of SciPlay, they would not vote in favor of any alternative merger, sale, or different type of corporate transaction regarding SciPlay, or proceed to sell or divest any portion of its ownership interest.

At the end of April, the company announced an expansion of its OpenGaming content with Rogue Games.

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