In a press release this Monday, global online and land-based casino game suppliers IGT (International Game Technology) have announced the sale of their social casino branch, Double Down Interactive LLC, to an affiliate of the Seoul-based social casino operators DoubleU Games. The deal will also see both companies form a multi-year strategic partnership to combine IGT games and DoubleU Games’ social casino products in creating “innovative” experiences in the global social casino scene.
IGT were mostly tied to the regulated lottery and casino industry before purchasing Double Down for $500 million (app.) back in 2012 and stepping into the social casino sector. According to Marco Sala, IGT’s CEO, the purchase has helped the company grow into one of the biggest and most successful names in the North American social casino scene, but after years of organic growth and increasingly appealing valuation levels, they’ve decided it was the right time to “maximize” the value of Double Down for IGT’s shareholders.
Per the agreement, DoubleU Games will be paying a cash price of 10.5x the 2016 Adjusted EBITDA of Double Down, or a total of $825 million, which IGT will redirect towards general corporate needs like debt reduction, according to the press release. The sale agreement will also see both parties enter a multi-year distribution, development and services partnership that would allow DoubleU Games to use IGT’s slots on their social casino products in return for recurring royalties.
The expected completion date of the sale is during Q2 of 2017, subject to approval from regulators, while IGT will be releasing a financial report that will include the impact of the sale as well as their Q1 results in late May. CEO of DoubleU Games, Ga-Ram Kim, also commented on the sale by saying the partnership will combine IGT’s premium slots with their operational excellence – a combination which they are confident will ensure the company’s future as a leader in the global social casino industry.
