Bally Technologies has entered into a definitive agreement to acquire Dragonplay, a leading online social casino company headquartered in Tel Aviv, Israel, with top-grossing applications for Android, as well as a significant presence on Facebook and Apple iOS.
According to company press materials, Dragonplay was launched in 2010 and ranks among the 10 top-grossing game developers in the social casinos with approximately 700,000 daily active users and nearly three million monthly active users across all platforms. In the card category on Google Play, Dragonplay’s poker game, Live Hold’em Pro, is ranked number one in the top-grossing category. In the casino category on Google Play, Dragonplay Slots is a top 10 performer in terms of active users.
“With over three years of topping various performance charts on Google Play, Dragonplay has successfully and consistently demonstrated its ability to acquire, monetize and retain social gamers by creating compelling games with staying power in the social casino space,” said Richard Haddrill, CEO for Bally in a prepared statement. “We expect this strategic acquisition to help position Bally at the forefront of social casino gaming by leveraging our world-class content, including proprietary table games and award-winning video slots, on Dragonplay’s increasingly popular social casino. Additionally, with the majority of its revenues generated from smartphones and tablets, Dragonplay has proven remarkable foresight and leadership in the mobile space, which is the fastest growing segment of social gaming.”
“Dragonplay and Bally share complementary cultures focused on innovation and user experience,” added Sharon Tal, CEO for Dragonplay. “Both companies are committed to providing unique and stimulating content to players across the globe that enjoy playing entertaining casino-style games. I am confident that leveraging Bally’s vast library of proven slot and proprietary table game content will provide our loyal player base with an even more robust experience, which is expected to augment Dragonplay’s growth trajectory.”
Total consideration includes approximately $51 million in upfront cash, plus the amount of net working capital, payable to Dragonplay’s shareholders in exchange for all of the issued and outstanding equity, and approximately $49 million in additional earn-out consideration and employee retention payments over the next 18 months subject to Dragonplay meeting certain financial performance targets. Bally expects to fund the transaction from cash on hand and proceeds from its revolving credit facility. For the 12 months ended March 31, 2014, Dragonplay generated over $10 million in EBITDA (earnings before interest, taxes, depreciation and amortization, including share-based compensation).
Subject to completion of certain customary closing conditions, Bally expects to close the acquisition of Dragonplay in July 2014 and expects the acquisition to be accretive to Bally’s fiscal 2015 adjusted earnings per share.