Deals and Acquisitions — Weekly Round-up for April 22, 2017

By Brian Cullingworth, Last updated Apr 22, 2017

Major Retail Contract Extension For Playtech And Rank Group

All 54 UK Grosvenor properties to integrate Playtech table and slot management system just a year on from initial casino management deal

The Rank Group plc, one of the UK’s most established gaming operators, has agreed a significant contract extension with Playtech plc to include the full integration of its table and slot management systems across its entire 54 land-based UK Grosvenor casino estate.

The agreement further strengthens Playtech’s pioneering Playtech ONE suite of software.

Today’s announcement comes just a year on from an initial deal to implement Playtech’s Neon casino management system across the casino estate which has since driven significant revenues for the group.

The new project will see Playtech implement the Neon Slots system to manage the group’s 3,000 electronic gaming machines and the Neon Tables iPad application to cover Grosvenor’s 650 tables.

Rank will migrate its 54 casinos from its existing system to Neon in the second half of 2017.

Rank Group’s Neon system, developed by Playtech subsidiary IGS, delivers a browser-based HTML5 user interface via Microsoft Azure.

Playtech’s retail division, including IGS, claims it is now firmly established as the fastest-growing supplier of systems to land-based casinos with the majority of UK casino groups using Neon to manage their operations.

In 2016, Playtech successfully implemented the Neon system across all 54 Grosvenor casinos in order to manage player tracking data, guest relations and cash desk operations, and to support the group’s responsible gaming, anti-money-laundering and security activities.

Rank also uses the Neon Analytics business intelligence platform, including a suite of custom dashboards designed to meet the specific needs of its venue and head office management teams.

Richard Playle, Director of Finance for Grosvenor Casinos, said in a company statement Thursday:

“The project to replace our management systems was very successful. We worked as a team to address a wide range of technical challenges and business innovations and have successfully rolled out a system which is performing well across the estate, and meeting our business and technical goals.

“Migrating our gaming systems to Playtech will enable us to complete our modernisation, offer an improved player experience and complete our vision for a single account and wallet across our retail and digital businesses,” he added.

Martin Sykes, Managing Director of Playtech Retail subsidiary Intelligent Gaming, said:

“We developed new features, optimised Neon for deployment in the Cloud, provided numerous integrations and supported the transition from the legacy systems, keeping data in step as we implemented across the 54 sites.”

I.G.T. To Sell Double Down Interactive

Sale includes a partnership agreement with South Korean social gaming buyer

International Game Technology has announced an agreement to sell its social casino subsidiary, Double Down Interactive LLC, to an affiliate of DoubleU Games Co., Ltd., a social casino operator headquartered in Seoul, South Korea, for $825 million.

The transaction establishes a new multi-year strategic partnership between IGT and DoubleU Games to provide innovative player experiences in the social casino market worldwide.

“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 in a company statement Monday.

“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.”

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 confident about DoubleU Games’ future as a global leader in social casino.”

The cash purchase price of $825 million represents 10.5x DoubleDown’s full-year 2016 Adjusted EBITDA.

Proceeds from the transaction will be used for general corporate purposes, including debt reduction, according to the IGT statement.

Upon the closing of the sale, the parties will enter into a game development, distribution and services agreement which will enable DoubleU Games to offer IGT’s casino game library on DoubleU Games’ combined social casino platforms, in exchange for ongoing royalties to IGT.

The sale has been approved by the Board of Directors of IGT and the necessary governance body of DoubleU Games, and is subject to customary closing conditions, including regulatory approvals. The sale is anticipated to be completed in the second quarter of 2017.

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