International Game Technology has signed an agreement to sell its social casino subsidiary, DoubleDown Interactive, to an affiliate of the South Korea-based social casino operator DoubleU Games, for US$825m.
The cash purchase price represents 10.5-times DoubleDown's full-year 2016 adjusted EBITDA.
Upon closure of the sale, the parties will enter into a game development, distribution and services agreement that will see DoubleU Games offer IGT's full casino game library on DoubleU Games’ combined social casino platforms, in exchange for ongoing royalties to IGT.
“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 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."
Ga-Ram Kim, CEO of DoubleU Games, added: “This transaction represents a unique and value-accretive partnership combining the operational excellence of DoubleU Games with IGT’s world-class slot content.
“With this partnership, we are excited and confident about DoubleU Games' future as a global leader in social casino."