Gaming machines maker WMS Industries Inc. is being swallowed up by larger rival Scientific Games Corp. for $1.42 billion in cash and debt.
The deal announced Thursday values WMS at $26 a share -- nearly 60 percent higher than the stock's closing price on Wednesday. Shares shot up in early trading Thursday after the deal was announced, rising 54 percent to reach $25.14, just under its 12-month high.
Scientific Games primarily makes instant lottery tickets and software. Executives said on a conference call that grabbing WMS will allow it to quickly expand its offerings in arcade-type games, slots and video poker.
While Scientific Games executives on a conference call rejected the characterization that WMS is in the midst of a "turnaround," business has certainly been improving in recent months for the Waukegan-based game maker.
WMS, formerly Williams, said in November is fiscal 2013 first-quarter profit tripled on a combination of higher revenue and lower costs.
The revenue was driven by new initiatives, including social gaming on Facebook and mobile phones, that's paid off.
Those new ventures have compounded the growth WMS has seen as it gambled on some other new outposts for its business.
In September, it received one of the first licenses to operate online poker games in Nevada, the only state other than Delaware to legalize some form of Internet gambling.
Online sites in Nevada are expected to go live in early 2013, but only people physically within that state's borders will be able to play. For everyone else, there's WMS's Facebook app, "Jackpot Party Social Casino."
The companies plan to save about $90 million through operating efficiencies by the third year they're combined. They expect the deal to close by the end of the year, pending regulatory and other approvals.
Executives say they are still working out the details on how the combined company will be run, so there's no word yet on whether the company's headquarters will remain in Illinois or if there will be any layoffs. A spokeswoman for WMS didn't immediately return a call seeking comment.
sbomkamp@tribune.com | Twitter: @SamWillTravel
WMS data by YCharts
Slot maker WMS Ind. to be sold for $1.5B
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Slot maker WMS Ind. to be sold for $1.5B
