-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HCtMzWurWUZEdxLqNXj0kL9r+dZwxxL0sS25vhk3ikt2Qggt8JacZuyM6UgOzSnC F7A4U47qPsVcma//RAYK8w== 0000922423-00-000788.txt : 20000522 0000922423-00-000788.hdr.sgml : 20000522 ACCESSION NUMBER: 0000922423-00-000788 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000518 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20000519 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AUTOTOTE CORP CENTRAL INDEX KEY: 0000750004 STANDARD INDUSTRIAL CLASSIFICATION: CALCULATING & ACCOUNTING MACHINES (NO ELECTRONIC COMPUTERS) [3578] IRS NUMBER: 810422894 STATE OF INCORPORATION: DE FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-11693 FILM NUMBER: 640274 BUSINESS ADDRESS: STREET 1: 100 BELLEVUE CITY: NEWARK STATE: DE ZIP: 19714 BUSINESS PHONE: 3027374300 MAIL ADDRESS: STREET 1: 100 BELLEVUE ROAD CITY: NEWARK STATE: DE ZIP: 19714 FORMER COMPANY: FORMER CONFORMED NAME: UNITED TOTE INC DATE OF NAME CHANGE: 19920317 8-K 1 FORM 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ------------------------------ FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported) May 18, 2000 0-13063 (Commission File Number) ------------------------------ AUTOTOTE CORPORATION (Exact name of registrant as specified in its charter) Delaware 81-0422894 (State of Incorporation) (IRS Employer Identification Number) 750 Lexington Avenue, New York, New York 10022 (Address of registrant's principal executive office) (212) 754-2233 (Registrant's telephone number) ------------------------------ ITEM 5. Other Events On May 19, 2000, Autotote Corporation, a Delaware corporation ("Parent"), ATX Enterprises Inc., a Delaware corporation and a newly formed, wholly owned subsidiary of Parent ("Merger Sub"), and Scientific Games Holdings Corp., a Delaware corporation ("Company"), announced that they have entered into an Agreement and Plan of Merger (the "Merger Agreement") pursuant to which, among other things, Parent will acquire the Company through the merger of Merger Sub with and into the Company. Under the terms of the Merger Agreement, each outstanding share of Company common stock, par value $.001 per share, is to be converted into the right to receive $26.00 per share in cash. Consummation of the merger is subject to satisfaction or waiver by the parties of certain closing conditions, including the receipt of regulatory approvals, approval by the stockholders of the Company and other customary closing conditions. It is expected that, subject to such conditions, the merger will be completed during the summer. Parent has received a commitment letter from affiliates of Donaldson Lufkin Jenrette and Lehman Brothers to provide debt financing for the merger, certain related costs and other purposes. Such commitment letter contemplates financing under senior term loan and revolving credit facilities, and issuance of senior subordinated notes, totaling up to $440 million or more. Depending on the financing alternatives chosen by the Company, such financing may include the issuance of warrants to purchase Company common stock, in amounts and on terms common in transactions of this nature, dependent on market conditions and the financing alternative being pursued. Such financing is subject to various terms and conditions and will be embodied in definitive documentation to be negotiated and completed by the parties. As Parent also announced, it has received commitment letters from Olivetti and other investors to purchase a contemplated new series of convertible preferred stock of Parent for an aggregate of $110 million. Those commitment letters contemplate the sale of at least $75 million of such new preferred stock at the time of the merger, and $35 million thereafter on or before January 31, 2001. Such new preferred stock, of which Olivetti or an affiliated entity would purchase a total of $100 million, would be convertible into Parent common stock at a conversion price of $6.00 per share (subject to potential reset to no less than $5.00 per share based on possible future market price minimums), would mature and become mandatorily convertible into common stock after five years and would pay dividends at the rate of 6% per annum (payable in kind in additional shares or, at Parent's option beginning with the ninth quarterly dividend date, in cash). The preferred stock commitment letters also contemplate that the definitive documentation will provide, among other things, that holders of the new preferred stock would have certain rights with respect to the composition of, and representation on, the Board of Directors and other matters, including rights to participate in certain future financings, if any, and would be subject for a period of time to maximum limitations on their purchase of additional stock, and have certain other rights and obligations. The purchase and sale of such new preferred stock are subject to various stated conditions, and will be subject to definitive documentation to be negotiated and completed by the parties. ITEM 7. Financial Statements, Pro Forma Financial Information and Exhibits (c) Exhibits. Exhibit Number Title - -------------- ----- 99 Press Release dated May 19, 2000 -2- SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. AUTOTOTE CORPORATION By: --------------------------------- Martin E. Schloss Vice President and General Counsel Date: May 19, 2000 -3- Exhibit Index Exhibit Number Title - -------------- ----- 99 Press Release dated May 19, 2000. EX-99 2 PRESS RELEASE Exhibit 99 Contacts: David Pye, Vice President Cliff O. Bickell, Autotote Corporation Vice President & CFO 212-754-2233 Scientific Games WWW.AUTOTOTE.COM International 770-664-3723 Investor Relations: Lisa D. Lettieri, Vice President WWW.SCIGAMES.COM Lippert/Heilshorn Assocs., Inc. (212) 838-3777 or lisa@lhai.com WWW.LHAI.COM Media Relations: Pamela Rigler, Account Supervisor Lippert/Heilshorn Assocs., Inc. (212) 838-3777 or pamela@lhai.com AUTOTOTE TO ACQUIRE SCIENTIFIC GAMES FOR $26 PER SHARE Olivetti to Invest $100 Million in Autotote NEW YORK, NY, ALPHARETTA, GA, MAY 19, 2000 - AUTOTOTE CORPORATION [AMEX:TTE] and SCIENTIFIC GAMES HOLDINGS CORP. [NYSE:SG] announced today that they have signed a definitive merger agreement. Autotote will pay $26 per share in cash, or a total of approximately $310 million, to the shareholders of Scientific Games. Scientific Games is a world leading supplier of lottery products, integrated lottery systems and support services, and pre-paid telephone cards with approximately 160 customers in 60 countries. The merger is subject to approval by Scientific Games' shareholders and certain government entities and agencies. Certain affiliates of Donaldson Lufkin Jenrette and Lehman Brothers have issued a commitment letter to provide debt financing for the acquisition and related costs. In a separate transaction, Olivetti has issued a commitment letter for $100 million of preferred stock, convertible into Autotote shares, which, upon conversion, would result in an approximately 30% participation in the combined entity. Other investors have issued similar commitment letters for an additional $10 million of convertible preferred stock. Ramius Securities, LLC acted as placement agent for the preferred stock issue. The acquisition merges the largest company in the pari-mutuel wagering business with the only full service instant ticket and lottery systems company in the world. The combined companies have reported revenue of $450 million and adjusted EBITDA (earnings before interest, taxes, depreciation, amortization and one time charges) of about $95 million for the last twelve months ending 1/31/00 (TTE) and 3/31/00 (SG). Autotote intends to combine its rapidly growing lottery on-line systems and terminal sales businesses with Scientific Games, already the second largest provider of lottery services worldwide. Both companies serve huge markets - $116 billion in handle for the worldwide pari-mutuel industry and $129 billion worldwide for the lottery industry - and will enjoy substantial leverage from their complementary products and sales channels and from the consolidation of corporate functions. Both companies have a long-standing reputation for product innovation and quality services, and offer complementary products and technologies. Autotote is the leading developer and provider of products and services to the global pari-mutuel industry. In North America alone, 65% of the estimated $20 billion of pari-mutuel wagering is processed by Autotote. Autotote is also a licensed pari-mutuel off-track betting operator in the US and Europe. As previously announced, Autotote has several domestic and international Internet-based wagering ventures underway. Scientific Games is the world leader in the manufacture and marketing of instant lottery tickets with an approximate 68% market share in the US. Scientific Games also provides extensive marketing and distribution services to lotteries, and has 41 installed on-line or instant ticket validation systems worldwide. In addition, Scientific Games is a leading international supplier of prepaid phone cards. Commenting on the acquisition, Lorne Weil, Chairman and CEO of Autotote, said, "The Scientific Games merger combined with the Olivetti investment gives us an entirely new strategic posture. With the former, we establish leading positions in two of the largest segments of the gaming industry while more than doubling revenue and cash flow. The association with the Olivetti/Telecom Italia Group, which owns 45% of Lottomatica S.p.A., the leading operator in the lottery business in Italy, will provide us with an important strategic partner worldwide and will add significant strength to our balance sheet." Lorne Weil added, "Scientific Games is widely regarded as the premier company in the worldwide instant lottery business. This acquisition creates a new company with very strong leverage to grow the lottery and pari-mutuel businesses throughout the world. Autotote has won a high proportion of recent on-line lottery contracts in the US using our highly successful Extrema(TM) terminals, most of which were previously sold to international customers. By combining the depth of experience of both companies, we can continue to innovate and expand our products and services into new territories, leveraging the extensive lottery customer relationships established by Scientific Games and adding our advanced technology to the mix. We also believe our recently announced interactive wagering services will be an attractive offering to lotteries worldwide. It is our objective to become the leading full-line provider of global lottery services, as we are in the pari-mutuel business." William Malloy, Chairman, President and CEO of Scientific Games, said, "In a world where `bigger is better' is no longer just a saying, the merger with Autotote gives the newly combined company the breadth and scale to develop and deliver the products that will drive the future success of the lottery industry. Furthermore, as the pari-mutuel industry has always applied superior technology to meet its needs, this combination will accelerate the pace of that technology's adaptation and introduction to the lottery industry. Our customers have reason to be excited about the new choices that this merger will bring to them." Mr. Malloy will remain as a consultant reporting to Mr. Weil for a period of at least two years and will be nominated for election to Autotote's board of directors. Autotote and Scientific Games will be hosting a conference call for investors and the media today at 11:00 A.M. ET. To access the call within the U.S. dial 888-243-1119 and for international callers dial 212-993-0201. AUTOTOTE CORPORATION provides computerized wagering equipment, computer software, management and satellite broadcast services for on-track, off-track and inter-track wagering, lotteries and legalized sports betting facilities. Autotote's systems are in use in the United States, Europe, Canada, Mexico, Latin America, New Zealand and the Far East. SCIENTIFIC GAMES INTERNATIONAL is a world leader in providing a full range of lottery products, integrated systems and support services to lotteries in more than 60 nations and 26 US states plus the District of Columbia, as well as various commercial businesses around the globe. Currently there are 38 US lotteries, including the District of Columbia. The company has production or operating facilities in Georgia, California and the United Kingdom, France, Germany, and Austria. OLIVETTI Group, among many businesses, is, through Telecom Italia, one of the world's largest providers of telecommunications services with significant presences in Europe and South America. Olivetti and Telecom Italia, in addition to their ownership in Lottomatica, provide wagering products and services to sports betting outlets and pari-mutuel facilities in Italy. This press release includes statements that constitute forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. This information involves risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. For certain information regarding these risks and uncertainties, reference is made to Autotote's Annual Report on Form 10-K for the year ended October 31, 1999 and Scientific Games Annual Report and Form 10-K for the year ended December 31, 1999. #### -----END PRIVACY-ENHANCED MESSAGE-----