International Game Technology PLC (IGT) on Monday announced the sale of its social casino subsidiary, Double Down Interactive LLC, to an affiliate of DoubleU Games Co., Ltd., a leading global social casino operator headquartered in South Korea.
The transaction was a necessary step in a new multi-year strategic partnership between IGT and DoubleU Games, said the company in a press release.
"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."
"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."
The cash purchase price is $825 million, which represents 10.5 times DoubleDown's full-year 2016 Adjusted EBITDA.
“Proceeds from the transaction will be used for general corporate purposes, including debt reduction,” said the company.
Upon the closing of the sale, both companies will enter into a game development, distribution and services agreement which will enable DoubleU Games to offer IGT's extensive casino game library on DoubleU Games' combined social casino platforms, in exchange for ongoing royalties to IGT.
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