Scientific Games to Acquire NYX Gaming Group

Strategic Benefits

• Creates Global Digital Gaming and Lottery Powerhouse - Together, Scientific Games, a world leader offering customers a fully integrated portfolio of technology platforms, robust systems, engaging content and services, and NYX, one of the fastest growing B2B real-money digital gaming and sports betting platforms in the world, will form an industry-leading force across iGaming, iLottery and Sports.

• Adds #1 Global Sports Betting Platform to Scientific Games´ Strong Portfolio - Scientific Games will now be perfectly positioned to capitalize on future regulatory developments in real-money wagering and sports betting by adding NYX´s industry-leading OpenBet Sportsbook. NYX´s digital Sportsbook can be seamlessly delivered throughout Scientific Games´ global gaming and lottery networks in existing and future regulated U.S. and global markets. 

• Accelerates Growth of Scientific Games Interactive Business - NYX´s worldwide channels, markets and customer base offer new growth opportunities to build on the significant momentum of Scientific Games´ existing interactive gaming business. 

• Strengthens and Supports Growth of NYX´s Business - NYX has significant stand-alone strategic momentum, an industry-leading suite of products, a growing global customer base and is the leading digital casino and account platform in North America. The acquisition will add significant new intellectual property, expertise and global reach to NYX, one of the world´s leading digital gaming content and technology companies. 

• Transaction Accretive to Earnings and Cash Flow in First Year 

"This important transaction creates a global gaming and lottery powerhouse. Scientific Games will be a stronger industry leader offering one of the broadest end-to-end portfolios of engaging content, innovative technologies and digital products and services across gaming and lottery," said Kevin Sheehan, Scientific Games´ President and Chief Executive Officer. "This strategic and financially compelling acquisition combines NYX´s premier digital gaming and sports betting platforms and expansive distribution network to our own global, industry-leading content, technologies and digital products and services. NYX ideally positions us to capitalize on the growing online gaming and sports betting markets." 

"Scientific Games´ acquisition of NYX will provide immediate and compelling cash value for our shareholders, expand the products and solutions we are collectively able to offer our customers and accelerate the execution of our long-term strategic plan," said Matt Davey, Chief Executive Officer of NYX. "We will now have scale, content and product development capabilities, complementary global infrastructure and access to an expanded customer base. We believe Scientific Games is the ideal partner for NYX, and we look forward to working alongside the talented Scientific Games team."

Transaction Terms and Details

The transaction will be financed with cash on hand and debt. It represents a 112 percent premium to NYX´s closing stock price on September 19, 2017; and the transaction is expected to be accretive to earnings and cash flow in the first year and leverage neutral at closing.
The Arrangement Agreement provides for the acquisition of the shares of NYX by way of a statutory scheme of arrangement under Guernsey Law, NYX´s jurisdiction of incorporation, and is subject to court approval and the approval of (i) a majority in number of NYX shareholders voting, either in person or by proxy, representing at least 75% in value of the outstanding NYX ordinary shares; and (ii) a simple majority of the votes cast by the holders of NYX ordinary shares, excluding those shares held by certain interested shareholders. The transaction, which was approved by each company´s board of directors, is expected to close in the first quarter of 2018, subject to the satisfaction of certain conditions, including NYX shareholder approval, approval by the Royal Court of Guernsey and receipt of gaming approvals in certain jurisdictions. NYX´s shareholder meeting and court hearing are currently anticipated to occur in the fourth quarter of 2017.

In making its determination, the board of directors of NYX considered, among other factors, fairness opinions (the "Fairness Opinions"), subject to the assumptions and limitations therein, from each of Lazard Frères & Co. LLC ("Lazard") and Macquarie Capital Markets Canada Ltd. ("Macquarie Capital") to the effect that the price per share of CAD$2.40 to be received by NYX shareholders pursuant to the transaction is fair, from a financial point of view, to the shareholders.

In connection with the transaction, certain shareholders who together hold in the aggregate approximately 18.4 million (or 17.0 percent) of NYX´s fully diluted shares, have entered into voting support agreements pursuant to which they have agreed to vote all of their shares in favor of the transaction. This includes Mr. Davey, who holds approximately 12.8 million of the fully diluted shares, or 11.8 percent.

The Arrangement Agreement contains customary deal protections in favor of Scientific Games, including a termination fee payable by NYX in certain circumstances. 

Management

It is expected that upon completion of the transaction, Matt Davey, currently Chief Executive Officer of NYX, will oversee a newly created Digital Gaming and Sports division at Scientific Games, working with the leadership of NYX and SG Interactive, including Leigh Nissim, Managing Director, B2B Interactive of Scientific Games. Matt Davey will report to Kevin Sheehan, Chief Executive Officer and President of Scientific Games. 

Financial and Legal Advisory 

Deutsche Bank Securities Inc. served as financial advisor to Scientific Games, and Cravath, Swaine & Moore LLP, McMillan LLP and Appleby (Guernsey) LLP served as legal advisors to Scientific Games.

Lazard and Macquarie Capital served as joint-lead financial advisors to NYX, and Latham & Watkins LLP, Carey Olsen LLP and Stikeman Elliott LLP served as legal advisors to NYX.

Information Circular and NYX Shareholders Meeting

A management information circular of NYX will be prepared and mailed to NYX´s shareholders over the coming weeks in advance of the special meeting to vote on the scheme of arrangement, providing shareholders with important information about the transaction and including copies of the Arrangement Agreement, the support agreements and the Fairness Opinions and certain related documents. Details of the transaction, as well as the rationale for the support of the transaction by NYX´s board of directors, will be set out in the circular and will be filed with the Canadian securities regulators and available on SEDAR at www.sedar.com.