IGT Sells Double Down Interactive to DoubleU Games for $825m
IGT has announced it will be selling their Double Down Interactive to South Korea’s DoubleU games for $825 million. Back in 2012 IGT paid $500 million for Double Down which at the time had many people asking if that was overpriced but now has proven to be a solid buy. IGT is the largest slot maker in the world and their strong social casino offering has put them in good stride.
In terms of the agreement DoubleU games will partner with IGT in the coming years to promote social casino games globally. CEO of IGT Marco Sala commented on the dale,” Since acquiring DoubleDown in 2012, IGT has grown it into one of the largest and most successful brands in the North American social casino mark. “After several years of strong, organic growth and increasingly attractive valuation levels, the time is right for us to maximize the value of this asset for our shareholders. We will continue participating in the growth of the social casino market through our multi-year, strategic partnership with DoubleU Games.”
The sale is just about done and has been approved by both companies, the only obstacle left is gaining regulatory approval which is expected to come through by Q2 in 2017. The cash price of $825 million represents 10.5 times DoubleDown’s full year 2016 EBITDA. Some of the proceeds from the transaction will go to debt reduction, and general corporate purposes.
CEO of the DoubleU games Ga-Ram Kim gave his comments on the sale,” This transaction represents a unique and value-accretive partnership combining the operational excellence of DoubleU Games with IGT’s world class slot content. With this partnership, we are excited and confident about DoubleU Games’ future as a global leader in social casino.”
Social casino brands are now considered big buck with the recent sale of Caesars’ Playtika for $4.4 billion and the acquisition of Big Fish Games by Churchill Downs in 2014 for $885 million.