Weighing Machine
Long/short equity

Scientific Games: This Equity Stub Has Significant Upside In The Making

In private equity the name of the game is to control as much revenue as possible with as little money down (equity) as possible. Then the goal is to improve the profitability of that revenue/those assets as much as possible. With its announcement to acquire Bally Technologies (NYSE:BYI) for $5.1 billion (all debt - in addition to the $3.1 billion it had prior to making this deal) on Friday, Scientific Games Corporation (NASDAQ:SGMS) allows the public to invest alongside private equity tycoon and SGMS Chairman Ronald Perelman (who owns ~40% of SGMS equity) in what has effectively become a publicly traded LBO. While SGMS sports a market cap of just $765 million, the proforma EBITDA of...

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