This morning New York-listed IGT Group Plc has informed the market that it has signed a ‘definitive agreement’ to sell its social casino subsidiary Double Down Interactive (Double Down) to South Korean games developer DoubleU Games (DoubleU).
IGT governance informed investors that it had agreed to sell its social casino asset for $825 million, representing a value of 10.5x on Double Down full-year 2016’s adjusted earnings.
Further to the sale of Double Down, IGT will now form a ‘multi-year strategic partnership’ with DoubleU seeking to enhance ‘player experiences’ within gambling and social gaming.
Moving forward, DoubleU has acquired the content rights to IGT’s casino games portfolio, which will see the company become the lead developer of IGT titles for social gaming verticals.
Updating investors Marco Sala, CEO of IGT commented on the sale “After several years of strong, organic growth and increasingly attractive valuation levels, the time is right for us to maximise 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.”
Double Down has been an asset of IGT’s since 2012, when the company acquired the social casino developer for $500 million, becoming an immediate player in the burgeoning social games market.
“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.”
IGT governance expects the sale of Double Down to be completed by Q2 2017, with proceeds of the transactions used for general corporate purposes, including group debt reduction, which currently stands at circa $7 billion.