IGT said Thursday it would acquire Double Down Interactive for $250 million in cash, $85 million in retention payments over the next two years and as much as $165 million in cash payable over the next three years, subject to certain financial targets.

Stifel Nicolaus Capital Markets gaming analyst Steven Wieczynski said "The deal offers an attractive bolt-on acquisition opportunity that is expected to be accretive to adjusted earnings in the near term, while providing the optionality to evolve into a much more meaningful earnings contributor over the longer term should the passage of U.S. online gaming legislation finally become a reality,"

Nomura Holdings gaming analyst Harry Curtis said the transaction positions IGT as a company can grow further. "IGT now has a new, and the fastest growing, distribution channel for its game content, which should allow them to attract new customers to their land based (slot) machines," Curtis told investors. "(For example), someone playing Golden Goddess on a social website might be inclined to go play a Golden Goddess slot machine at a land-based casino."

IGT Chief Executive Patti Hart said "We intend to drive meaningful value from this rapidly growing distribution platform that reaches a new, but complementary, demographic of gamers”

Launched on Facebook in 2010, DoubleDown describes itself as the world’s largest virtual casino with 4.7m monthly active users. IGT believes the deal will give it a foothold in casino-style social gaming while broadening its own titles' appeal.
 

Matty