If you bet that the $1.5 billion acquisition of slot machine manufacturer WMS Industries by Scientific Games Corporation would increase New York-based Scientific’s street cred on Wall Street, please step forward: ding ding ding, we have a winner!  The buyout is expected to bring both WMS and Scientific Games in the neighborhood of $100 million in complementary cost-savings between the two merged companies, and that’s making investors’ ears perk up.

Lottery Meets Slots

Scientific has been on the lookout for a slot machine maker for awhile now; the company provides lottery systems and the equipment to run the same to many American states, Canadian provinces and even some foreign countries. Don’t count on Nevada being one of those though; not gonna happen.

For WMS stockholders, life is good; Scientific Games shelled out $26 per WMS share, which was approximately 59 percent over what the slot manufacturer closed at back on Jan. 31 of this year.

“We continue to grow more comfortable with the pending WMS acquisition from both a fundamental and more importantly business stability perspective,” said Stifel Nicolaus Capital Markets gaming analyst  Steven Wieczynski about the merger at a recent investor meeting.

Gaming Platforms Will Benefit Lottery Customers

And although Nevada may not be getting a state lottery anytime soon, Scientific can still make good use of WMS’ social- and interactive-gaming platforms for the former’s lottery markets elsewhere.

Among slot manufacturers worldwide, WMS is considered the third-largest, right behind International Game Technology (IGT) and Bally Technologies. Other smaller slot makers are also taking some market share; among them Konami Gaming, Aristocrat Technologies, and Multimedia Games. Some of these also-ran manufacturers have gained increasing market share due at least in part to casino growth in Ohio, Maryland, Pennsylvania and other land-based gaming states.

The merger has no federal landmines to avoid; the Federal Trade Commission (FTC) has officially signed off on the buyout, citing no antitrust issues that would need to be addressed.

“We continue to grow incrementally more positive on the Scientific Games story,” Wieczynski said.