Brookfield Business Partners Snaps up Scientific Games for $5.8B

Brookfield Business Partners (BBU) has inked a deal, along with its institutional partners, to acquire Scientific Games Corporation’s global lottery services and technology business for $5.8 billion.

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Markedly, shares of Brookfield Business Partners, the flagship listed business services and industrials company of Brookfield Asset Management (BAM), have gained 61.4% over the past year.

Scientific Games Lottery is an important service provider to the global lottery ecosystem and has innovative expertise in game design, production, distribution, systems and terminals, and turnkey technology solutions. It has long-term relationships with 130 lottery entities in more than 50 countries.

The acquisition is expected to close in the second quarter of 2022, subject to certain regulatory approvals.

Brookfield plans to finance the investment with equity and cash available, with the balance funded by institutional partners.

David Nowak, Managing Partner at Brookfield Business Partners, commented, “We are pleased to continue to grow our business with the acquisition of a market leader and essential service provider to governments around the world.”

RBC Capital analyst Geoffrey Kwan recently reiterated a Buy rating on Brookfield Business Partners with a price target of $61 (26.2% upside potential)

Kwan forecasts the company to report a loss of $0.63 per share for the third quarter of 2021.

Overall, the stock has a Strong Buy consensus rating based on 4 unanimous Buys. The average Brookfield Business Partners price target of $56.75 implies 17.4% upside potential.

According to TipRanks’ Smart Score rating system, Brookfield scores a “Perfect 10”. This suggests that the stock is likely to outperform market averages.