Breaking: IGT to buy Double Down Interactive
American provider preparing to pay US$500m total consideration for social gaming company.
US gaming machines provider IGT is set to buy social gaming company Double Down Interactive, whose Double Down Casino flagship product is one of the largest gambling-related apps on Facebook.
The acquisition would comprise a total consideration of US$500m, with half of this coming in the form of cash. The remainder is broken down into $85m in retention payments over the next two years, plus $165m in cash payable over the next three years providing the Seattle-based developer meets financial performance targets.
The cost is five times higher than the amount paid by Caesars Entertainment in May for its 51% share in social game developer Playtika, reported as $80-90m but believed to be closer to $100m.
Israeli company Playtika is responsible for the Slotomania online slot, which included former 888 CEO Gigi Levy among its investors and attracts 5.4m monthly active users on Facebook.
Since launching in April 2010, Double Down Casino has grown to the point where it now boasts 4.7m monthly active users, according to Appdata.com, with its daily active users total currently standing at 1.3m.
It works primarily on a freeplay model with players given the opportunity to purchase extra credits, and has estimated annual revenues of $10m+.
The $500m projected total consideration dwarfs IGT’s recent outlay on Entraction, with the Swedish poker network operator purchased last summer for approximately £70m.
Patti Hart, CEO of IGT, suggested the acquisition would help her company expand its customer-base, explaining: “The addition of Double Down launches IGT into a leadership position in social gaming, extends our global reach through new mediums, and leverages our unmatched expertise in game development. We intend to drive meaningful value from this rapidly growing distribution platform that reaches a new, but complementary, demographic of gamers.”
Double Down CEO Greg Enell said: “Double Down and IGT share complementary cultures focused on innovation and creativity. Both companies are committed to providing unrivaled quality, service and entertainment to millions of players.”
Double Down is one of the top 10 social gaming companies featured in the cover story in January’s issue of eGaming Review.