International Game Technology (IGT), one of the top international gaming operators on a global scale, revealed that it has inked a definitive acquisition deal to dispose of one of its assets. Under the purchase agreement, IGT is to sell its social casino subsidiary Double Down Interactive to one of DoubleU Games Co.’s affiliates.
IGT has used the services of Raine Group and Credit Suisse International as financial advisors, and Wachtell, Lipton, Rosen & Katz and Cooley LLP have acted as legal counsels. DoubleU Games has used Deutsche Bank as a financial advisor and Kim & Chang and Morgan Lewis & Bockius LL as legal counsels.
The assets transaction inked by the two companies comes as a new multi-year strategic partnership deal which is expected to offer improved and innovative gaming experience to customers in the social casino market on a global scale.
The Chief Executive Officer of International Game Technology Marco Sala commented on the announcement, saying that IGT had managed to become one of the biggest and most respected brands in the social casino market of North America. According to Mr. Sala, that was the right time to maximise the value of Double Down Interactive for the company’s shareholders, after the subsidiary has managed to generate a few years of constant organic growth. The subsidiary has been part of IGT’s assets since 2012.
Currently, DoubleU Games is one of the leading international social casino operators, with a headquarters office located in Seoul, South Korea. The collaboration deal is expected to provide IGT with the chance to take care of its general corporate purposes, but it is also expected to enhance the presence of DoubleU Games on a global scale.
At the time when the official announcement was published on IGT’s official website, the assets transaction had already received the approval of the company’s Board of Directors, as well as the necessary governance body of DoubleU Games. It would be now subjected to some customary conditions such as regulatory approvals in order to be finalised. As revealed by the International Game Technology, the deal is expected to be completed over the second fiscal quarter of 2017.
The cash price of the deal is estimated to $825 million, representing ten and half times the adjusted EBITDA (earnings before interest, taxes, depreciation and amortisation) of DoubleDown for the full year 2016. IGT revealed that the proceeds generated from the sale would be used for “general corporate purposes” and debt reduction. The operator is expected to publish an update to its financial projection including the full impact of the sale in late May 2017. This is also the time when International Game Technology is expected to provide its financial results for the first quarter of 2017.
The Chief Executive Officer of DoubleU Games Ga-Ram Kim confirmed of the deal. The head of the company also explained that the partnership offered unique opportunities not only for IGT, but also for DoubleU Games that was expected to stick to a future of a leader in social casino products and services in a global scale.
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Olivia Cole
