Scientific Games (SGMS) to Acquire Bally Tech (BYI) in $5.1B Deal Aug 1, 2014 07:23AM

Scientific Games Corporation (Nasdaq: SGMS) and Bally Technologies, Inc. (NYSE: BYI) announced that the companies have entered into a definitive merger agreement whereby Scientific Games has agreed to acquire all of the outstanding Bally common stock for $83.30 in cash per share, which represents a 38 percent premium to Bally's closing stock price on July 31, 2014. The aggregate transaction value is approximately $5.1 billion, including the refinancing of approximately $1.8 billion of existing Bally net debt. The transaction was unanimously approved by the boards of directors of the two companies.

"The acquisition of Bally provides us with a unique opportunity to combine two exceptional companies with long track records of creating leading-edge games and gaming technology products for players and delivering innovative solutions to our customers," said Gavin Isaacs, Scientific Games' President and Chief Executive Officer. "With leading gaming, lottery, and interactive content, world-class systems capabilities and table game offerings, we believe that the combined company will be uniquely positioned as a strategic partner for gaming and lottery operators, offering a highly diversified suite of value-enhancing products and services across multiple worldwide distribution channels and platforms."

"Having worked side-by-side with the talented teams at Bally and more recently Scientific Games, I am confident this combination brings together best-of-breed cultures and is occurring at a truly opportune time as both companies are committed to bringing the highest value products and services to customers," continued Mr. Isaacs. "The combined company will feature world-class research and development capabilities, an expanded base of recurring revenues and greater worldwide penetration in key geographies, including the AustralAsia region. In addition to the strategic value of the transaction to our customers, we expect to create significant shareholder value as the transaction is expected to deliver immediate earnings and cash flow accretion and will allow us to meaningfully reduce our leverage over the next three to four years. Reflecting both organizations' recent post-merger integration successes, we have identified and expect to realize $220 million in annual cost synergies and $25 million of annual capital expenditure savings by the end of the second year following the closing of the transaction."

"The combination with Scientific Games will benefit our customers and shareholders," said Richard Haddrill, Bally's Chief Executive Officer. "Increased scale, geographic diversity and product development capabilities will create a new runway of growth opportunities through new products and a comprehensive portfolio of customer-focused solutions. This transaction delivers immediate value to our shareholders, and the highest share price in our history. We look forward to working with our new colleagues at Scientific Games to execute a detailed integration plan to realize customer satisfaction and additional value."

Expanded Portfolio and Improved Operating Efficiencies

The transaction would expand Scientific Games' portfolio of products and solutions to include leading casino management systems and table products, including automatic shufflers, proprietary table games and electronic table systems. It would also expand the range of Scientific Games' social and real-money iGaming and iLottery products and services. This expanded portfolio is expected to position Scientific Games to better cross-utilize content and technology across the lottery, gaming and interactive sectors to propel future growth.

The combined company is expected to have world-class global sourcing, production, engineering and product development capabilities, as well as a large installed global base of diverse recurring revenue products and services. Scientific Games and Bally generated combined revenue of approximately $3.0 billion in the 12-month period ended March 31, 2014.

Scientific Games expects to achieve the anticipated $220 million of cost synergies and $25 million of capital expenditure savings by consolidating operations and generating efficiencies in the areas of manufacturing, engineering, field and customer service and administrative operations. Scientific Games anticipates incurring $75 million of costs to achieve the cost synergies and $40 million in capital costs to complete the integration of the companies. In addition, the combined company is expected to benefit from accelerated utilization of various tax attributes against U.S.-based pre-tax income.

Transaction Terms

Scientific Games would acquire all of the outstanding shares of Bally for $83.30 per share in cash, for a total transaction value of approximately $5.1 billion, including net debt of approximately $1.8 billion. The acquisition would be financed with debt and cash on hand and Scientific Games has obtained committed debt financing for the transaction, which is not subject to a financing contingency.

The acquisition is subject to customary closing conditions, including receipt of Bally shareholder approval and antitrust and gaming regulatory approvals, and is currently expected to be completed in early 2015. Scientific Games and Bally are both licensed in more than 300 gaming jurisdictions worldwide, which is expected to help facilitate obtaining the required gaming regulatory approvals.

Upon closing of the transaction, Mr. Isaacs will continue as President and Chief Executive Officer of Scientific Games, and it is anticipated that Mr. Haddrill and David Robbins, Chairman of the Board of Directors of Bally, will join the board of directors of Scientific Games, with Mr. Haddrill anticipated to serve as Vice Chairman.

Athlon Energy (ATHL) Prices 12.5M Common Secondary Offering at $46.25/Share Aug 1, 2014 06:44AM

Athlon Energy (NYSE: ATHL) announced the pricing of an underwritten public offering by certain selling stockholders that are funds affiliated with Apollo Global Management, LLC (NYSE: APO) of 12,500,000 shares of common stock at $46.25 per share. The selling stockholders have also granted the underwriters a 30-day option to purchase up to an additional 1,875,000 shares of Athlon’s common stock at the public offering price. The offering is expected to close on August 6, 2014, subject to customary closing conditions. Athlon will not sell any shares of common stock in the offering and will not receive any proceeds therefrom.

Citigroup Global Markets Inc. and Goldman, Sachs & Co. are acting as joint book-running managers for the offering. Barclays Capital Incorporated, Credit Suisse Securities (USA) LLC, RBC Capital Markets, LLC, Tudor, Pickering, Holt & Co. Securities, Incorporated, and UBS Securities LLC are also acting as book-running managers for the offering.

Perion Network (PERI) Extends Bing Partnership by Three Years (MSFT) Aug 1, 2014 06:27AM

Perion Network (NASDAQ: PERI) has signed a 3 year agreement with Bing, extending its existing partnership, starting January 1, 2015 through December 31, 2017. Upon mutual agreement, the agreement may be renewed for 2018 as well. The agreement includes desktop and tablet distribution with limited exclusivity in the United States as well as mobile distribution.

“We are very excited to renew with Microsoft (Nasdaq: MSFT) for another 3 years. We are committed to providing app developers with great solutions and working with Microsoft and is an important part of that solution,” commented Ms. Danielle Ullner, Perion VP of Search Partnerships. “We are particularly excited by the fact that mobile is part of our agreement and that together we are focused on building out our end to end technology platform for developers across all devices.”

In parallel, and in conjunction with the fact that revenues from Google are no longer material to Perion, the Company decided to exercise its right to opt-out of its ClientConnect agreement with Google as of August 31, 2014. The Company continues to work with Google through its original Perion agreement which expires in June 2015.

In addition to Bing and Google, the Company also has search distribution partnerships with and Yahoo (Nasdaq: YHOO).

MakerBot (SSYS) Launches MakerBot Europe Aug 1, 2014 06:23AM

Stratasys' (Nasdaq: SSYS) MakerBot announced the expansion of its international operations with the launch of MakerBot Europe. This is a major step in leading the desktop 3D printing industry not only in the United States, but in practically every major European country. As part of this expansion effort, MakerBot is acquiring certain assets of its Germany-based partner, HAFNER’S BÜRO, which has been a MakerBot reseller in Germany for several years. Effective immediately, MakerBot Europe will continue to manage the large network of MakerBot resellers throughout Central and Eastern Europe. MakerBot’s current resellers will transition into working with MakerBot Europe, and the new organization will be led by Alexander Hafner, who will be general manager of the new division. Hafner has been owner and president of HAFNER’S BÜRO since its founding in 1988.

“We are so excited to officially launch MakerBot Europe and expand MakerBot’s global reach with the creation of MakerBot Europe,” noted Jenny Lawton, president of MakerBot. “Alexander Hafner and HAFNER’S BÜRO are longtime MakerBot partners and have extensive knowledge of our products, 3D printing and design solutions, and the European market. We are thrilled that they will play a larger role in the MakerBot family and will represent the company with our European distributors and resellers.”

HAFNER’S BÜRO has managed and sold MakerBot products for several years and has extensive relationships with key MakerBot customers, resellers and events throughout Europe. Frank Alfano, chief revenue officer at MakerBot, noted, “The creation of a MakerBot Europe office demonstrates MakerBot’s commitment to the European market and helps align our overall business growth strategy in the region. Germany has also long been the European hub for 3D printing as overall interest in 3D printing has grown throughout Europe. We have confidence that the area will continue to grow in dominance in the 3D printing arena.”

“MakerBot Europe is committing itself to Europe as one of MakerBot’s most important markets for 3D printing. We are very proud to be MakerBot’s partner of choice for this exciting step. I think it is a unique opportunity in both of our companies’ histories. We are excited to be able to take our 3D printing experience and years of working with MakerBot to expand that knowledge throughout Europe,” said Alexander Hafner, general manager of the new MakerBot Europe office. “We are firm believers in MakerBot desktop 3D printing and scanning technology and look forward to working with the extensive network of MakerBot resellers in Europe.”

The acquisition of certain assets of HAFNER’S BÜRO is a major step in securing a strong foothold in the European market for MakerBot. While the European market has always been robust for MakerBot, and MakerBot is a global leader in the desktop 3D printing industry, the company has traditionally focused its sales and marketing efforts in the United States. Now, with the creation of MakerBot Europe, it will be able to expand its reach in many countries.

MakerBot Europe will encompass Austria, Belgium, Croatia, the Czech Republic, Denmark, Finland, Germany, Greece, Hungary, Italy, Luxembourg, the Netherlands, Poland, Romania, Russia, Serbia, Spain, Sweden, Switzerland, Turkey, Ukraine, the United Kingdom and other European countries. Existing MakerBot distributors and resellers will continue to run their businesses as usual and are expected to start to be assimilated into MakerBot Europe’s sales and marketing organization within a six-month time frame. During that time, MakerBot Europe will also be expanding the company’s reach and looking for additional strategic partnerships with resellers and key retailers that can help expand MakerBot’s penetration in the European market.

“HAFNER’S BÜRO in Stuttgart was chosen as the hub for MakerBot Europe due to their excellent performance record, enthusiasm for 3D printing and MakerBot products, and central location,” noted Frank Alfano. “We are excited to expand our reach and our mission to Europe to put a MakerBot Replicator Desktop 3D Printer on the desk of every engineer, architect and educator, and in every school and home.”

Hill International (HIL) Prices 8.5M Common Stock Offering at $4.25/Share Aug 1, 2014 06:14AM

Hill International (NYSE: HIL) announced the pricing of an underwritten public offering of 8,500,000 shares of its common stock, offered at a price to the public of $4.25 per share. The company has granted the underwriters a 30-day option to purchase up to an aggregate of 1,275,000 additional shares of common stock to cover overallotments, if any. All of the shares in the offering are to be sold by the company. The offering is expected to close on or about August 6, 2014, subject to customary closing conditions.

KeyBanc Capital Markets Inc. is acting as sole book-running manager in connection with the offering. William Blair & Company, L.L.C., Houlihan Lokey Capital, Inc., Boenning & Scattergood, Inc., Sidoti & Company, LLC and SG Americas Securities, LLC are serving as co-managers in connection with the offering.

The company intends to initially keep $10.0 million of the net proceeds as cash or cash equivalents and to use the balance of the net proceeds from the offering to meet certain of its obligations and repay a portion of its outstanding indebtedness under its existing credit facilities.

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