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Scientific Games Corp. said it would acquire rival WMS Industries Inc. for about $1.42 billion to beef up its gaming machines business.
Scientific Games, which makes tickets and software for lotteries, will pay $26 for each WMS common share, a 59 percent premium to the stock's closing price of $16.37 on the New York Stock Exchange on Wednesday.
WMS shares rose 54 percent to $25.25 in premarket trade on Thursday.
The deal, which includes debt of $85 million and cash on hand of $55 million, will immediately add to earnings per share and free cash flow, Scientific Games said.
WMS Industries, which competes with Bally Technologies Inc., manufactures and distributes games, video and mechanical reel-spinning gaming machines and video lottery terminals.
BofA Merrill Lynch and Credit Suisse Securities LLC advised Scientific Games on the deal, while Cleary Gottlieb Steen & Hamilton LLP was the legal adviser.
Macquarie Capital advised WMS on the deal.
Scientific Games shares closed at $8.93 on the Nasdaq on Wednesday.
WMS Net Income Quarterly data by YCharts
Slot maker WMS Ind. to be sold for $1.5B
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Slot maker WMS Ind. to be sold for $1.5B
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Slot maker WMS Ind. to be sold for $1.5B
