Bally's Corporation
11/01/2024 | Press release | Distributed by Public on 11/01/2024 14:07
Material Event Form 8 K
Item 8.01 Other Events.
On October 31, 2024, Bally's Corporation ("Bally's" or the "Company") entered into an agreement to sell its interactive business in Asia and certain other international markets (the "Carved-Out Business") to a company (the "Buyer") formed by members of the management of the Carved-Out Business. Ownership of certain intellectual property has been placed in trust and will be licensed to the Buyer for a term of five years (subject to extension). The Company will also provide the Buyer with certain transition services. The Buyer is acquiring the Carved-Out Business in exchange for a note. Bally's will have no role in the management, operations, or governance of the Carved-Out Business.
The transaction is intended to allow Bally's to focus its capital and resource allocation on North American and European business, and this Carved-Out Business will benefit from focused management attention and aligned ownership.
The financial impact of the transaction is not expected to be material to Adjusted EBITDA or free cash flow of the Company. Going forward, the financial statements of the Company will only reflect licensing and royalty revenues received from the Buyer, which are expected to be lower than revenues under the current accounting treatment, but the profitability margins associated with those licensing revenues are expected to be higher as is customary in the gaming industry for IP license business models. The expected modest decline in Adjusted EBITDA and free cash flow resulting from the transaction are expected to be mitigated by cost actions to simplify Bally's organizational structure and other cost reductions.
Cautionary Statement Concerning Forward-Looking Statements
Certain of the matters discussed above constitute forward-looking statements within the meaning of the federal securities laws. Forward-looking statements in this communication include, but are not limited to, regarding the future prospects of the Company following the completion of the transaction. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. As a result, these statements are not guarantees of future performance and actual events may differ materially from those expressed in or suggested by the forward-looking statements. Any forward-looking statement made by the Company in this report filed with the SEC and other public statements made from time-to-time speak only as of the date made. New risks and uncertainties come up from time to time, and it is impossible for the Company to predict or identify all such events or how they may affect it. The Company has no obligation, and does not intend, to update any forward-looking statements after the date hereof, except as required by federal securities laws. Factors that could cause these differences include, but are not limited to those included in the Company's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other reports and materials filed by the Company with the SEC.