International Game Technology, a global leader in the gambling kind of gaming machines and systems products, has acquired Seattle-based social game studio Double Down Interactive in a deal valued at $500 million.
IGT said it intends for Double Down to continue doing what it’s been doing with reasonable independence, staying in its Seattle facility and remaining under the leadership of current chief executive officer Greg Enell.
The acquisition puts IGT into Facebook and the social gaming field in general. Backed by its new parent company, Double Down is adding at least ten new full-time positions to its staff of 70 so that it can accelerate its development of new social and mobile games.
Double Down Interactive’s Double Down Casino came in at fourth place in Facebook’s 2011 end-of-year social game report. According to AppData.com, Double Down Casino has 4.7 million monthly active users, up from 3.3 million in October 2011.
Patti Hart, chief executive officer of IGT, said the acquisition was important to continue IGT’s growth. “As technological innovations increasingly influence consumer behavior, social dynamics are quickly transforming entertainment and gaming experiences everywhere,” she said. “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.”
The transaction is estimated to be accretive to IGT’s fiscal 2012 adjusted earnings and is projected to close within the second quarter of its current fiscal year. The total consideration includes $250 million in cash, $85 million in retention payments over the next two years and up to $165 million in cash payable over the next three years subject to Double Down meeting certain financial performance targets. IGT expects to fund the transaction from cash on hand.
“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,” said Greg Enell, chief executive officer of Double Down. “Leveraging IGT’s Research and Development, global reach, and best-in-class content will provide our loyal player base with an even more robust experience and is expected to augment Double Down’s growth trajectory.”