Bally Offers Figures To Assess Pre-merger Operating Performance


Aug. 18 2020, Updated 5:26 a.m. ET

Financial projections

The Bally Technologies, or Bally, management team prepared internal financial forecasts for fiscal years 2015 and 2016.  The company provided this information to Scientific Games (SGMS) and Macquarie Capital because it believed it could be useful in evaluating, on a prospective basis, Bally’s potential operating performance and cash flow.

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Unlevered free cash flow

The above chart shows the estimated unlevered free cash flow that Macquarie Capital considered while analyzing Bally’s discounted cash flow. These amounts were derived from July 2014 projections provided by Bally’s board.

Unlevered free cash flow shows how much cash is on hand to pay for operations without taking into account other financial obligations.

Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) includes acquisition-related costs, such as leased gaming equipment, and share-based compensation.

These amounts were derived from the July 2014 projections provided by Bally’s board. The internal financial projections don’t take into account any circumstances or events occurring after the date on which they were prepared. Neither do they take into account the transactions contemplated by the merger agreement.

Industry and investments

Last year in July 2014, GTECH, an Italian company that provides and operates online lottery transaction processing systems, agreed to acquire International Game Technology (IGT). This acquisition is expected to enhance GTECH’s unlevered free cash flows.

The VanEck Vectors Gaming ETF (BJK), the PowerShares Dynamic Leisure and Entertainment ETF (PEJ), and the Consumer Discretionary Select Sector SPDR Fund (XLY) help investors minimize the risk of investing in a single casino company.


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