Scientific Games enters Latin market

March 26, 2002 6:37 AM
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Looking to crack the lottery business south of the border, Scientific Games Corporation (SGMS) will soon acquire 65% of a company that is the leading supplier of lottery tickets in Latin America.

According to a company announcement, SGMS will pay a maximum of $8,255,000 for the majority ownership of Serigrafica Chilena S.A. The agreement requires that the acquirer pay $3.9 million in cash at the closing and up to $4,355,000 in cash or stock upon the achievement of certain earnings targets over the next four years.

“Historically,” explained Lorne Weil, chairman and CEO of Scientific Games, “there have been significant duties on the ­­import of instant tickets and phone cards to Latin America which, together with logistical issues, made doing business there prohibitive. This acquisition opens the door to a significant new market for Scientific Games. In ­­Central and South America, approximately 1.1 billion instant tickets and 360 million prepaid phone cards were sold last year and none of these products incorporated the product ­­development, advanced communications, printing technology and security that ­­Scientific Games uses to protest issuers and their customers.”

 On the corporate front, SGMS said it has filed to offer 12.5 million common shares through an underwriting syndicate led by Bear, Stearns & Co. Inc. Also, the underwriters were granted the option to purchase from Scientific Games up to 1,875,000 shares to cover over-allotments.

The company didn’t say how they expected to apply the proceeds to corporate needs.