IGT offloads DoubleDown to DoubleU Games for $825m
New York-listed firm to complete sale of social casino subsidiary to South Korean firm in Q2 2017
International Game Technology (IGT) has sold its social casino business DoubleDown to an affiliate of South Korean studio DoubleU Games for $825m.
IGT, which paid $500m to acquire DoubleDown in 2012, will continue to work with DoubleU Games after the deal closes, providing game development and distribution services, as well as its casino game library in exchange for ongoing royalties.
The sale, which is subject to regulatory approval, is expected to be completed in the second quarter of 2017.
New York-listed IGT said the $825m fee, which represents 10.5x DoubleDown’s 2016 EBITDA, will be used for “general corporate purposes”, including debt reduction.
“Since acquiring DoubleDown in 2012, IGT has grown it into one of the largest and most successful brands in the North American social casino market,” said Marco Sala, CEO of IGT.
“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.”
DoubleU Games accounted for 3.8% of the social casino market in Q4 2016, according to analysts at Eilers and Krejick, compared to 6.3% for DoubleDown.
The Seoul-based developer generated gross revenues of $36.7m in the quarter, up 15% year-on-year compared to Q4 2015. Its flagship DoubleU Casino accounted for 90% of total revenues.
“This transaction represents a unique and value-accretive partnership combining the operational excellence of DoubleU Games with IGT’s world class slot content,” said Ga-Ram Kim, CEO of DoubleU Games.
“With this partnership, we are excited and confident about DoubleU Games’ future as a global leader in social casino.”