Casino equipment and game technology developer Light & Wonder Inc says it has signed an agreement to acquire the charitable gaming assets – known as Grover Charitable Gaming – of U.S.-based Grover Gaming Inc and G2 Gaming Inc.
The agreement consists of US$850 million payable in cash on closure of the deal, and an additional fee of up to US$200 million to be paid on the achievement of financial milestones based on a “four-year revenue based earn-out”, stated Light & Wonder in a Tuesday press release.
According to the announcement, the upfront consideration implies a multiple of circa 7.7 times based on Grover’s adjusted earnings before interest, taxation, depreciation, and amortisation (EBITDA) in 2024.
Grover Charitable Gaming is privately owned by Garrett Blackwelder, and is said to have an installed base of more than 10,000 leased electronic pull-tab units across five U.S. states, operating under a recurring revenue model.
Under the terms of the agreement, Garrett Blackwelder will collaborate with Light & Wonder “to help drive the continued success of the business over the next three years,” observed the suitor.
The gaming supplier expects the transaction to close during the second quarter of 2025, “subject to required regulatory and other approvals and customary closing conditions”.
The announcement cited Matt Wilson, president and chief executive of Light & Wonder, as saying: “Grover Gaming is a leading player in charitable gaming, a category that has experienced significant growth in recent years.”
“This transaction complements our position as the leading cross-platform global games company by adding another compelling regulated adjacency to our profile,” stated the CEO.
He added: “Importantly, there are exciting incremental revenue opportunities to be realised by leveraging Light & Wonder’s proven land-based gaming content to a new and loyal customer base.
Garrett Blackwelder, CEO and founder of Grover Gaming, said in prepared remarks that Light & Wonder was an “ideal partner” for Grover Gaming, “given our similar company cultures and dedication to innovation and customer service”.
In Tuesday’s update, Light & Wonder said the acquisition of Grover Charitable Gaming provided “several strategic and financial benefits” the firm’s shareholders.
The deal “is expected to be highly accretive to value and earnings with high-single digit adjusted NPATA [net profit after tax adjusted] per share accretion in the first full calendar year post acquisition,” added the gaming supplier.
Post acquisition, Light & Wonder will operate the business with a combination of Grover Gaming and Light & Wonder employees, it said.
Light & Wonder expects to fund the acquisition with existing cash and incremental debt financing. Post-acquisition, the company expects its net debt leverage ratio on a combined basis to remain within its target range of 2.5 times to 3.5 times.
On Tuesday, Light & Wonder reaffirmed its US$1.4-billion target for consolidated adjusted EBITDA this year, without any adjusted EBITDA contribution from the acquisition of Grover Charitable Gaming.
Light & Wonder to pay up to US$1bln to acquire Grover Gaming’s charitable gaming assets
