U.S. slot-maker International Game Technology, which owns Seattle’s Double Down Interactive, has been sold to an Italian lottery operator Gtech for $4.7 billion in cash and stock.
For the past month, it was known that IGT had been exploring a possible sale following the disclosure earlier this year that it was facing financial troubles.
Gtech will pay $4.7 billion in cash and stock for IGT and will also take on $1.7 billion of the U.S. firm’s debt, according to Reuters, which notes that the total deal value of $6.4 billion exceeds Gtech’s own market capitalization of $4.4 billion.
In March, the Las Vegas-based IGT said it was taking “actions to re-align its cost structure for long-term earnings growth.” As part of that, it cut seven percent of its workforce, and was forced to lower its 2014 financial outlook.
Following today’s announcement, IGT’s stock is trading 9.5 percent higher at $16.98 a share, valuing the company at $4.2 billion.
IGT is best known for its games that can be found on casino floors, including popular slot machines, such a “Wheel of Fortune,” and “Avatar.” But in early 2012, it paid up to $500 million for Seattle social gaming powerhouse Double Down Interactive to get into digital gaming, a move an investor criticized during a proxy fight.
Double Down, which builds games for Facebook and mobile, operates titles such as Black Jack Bonanza and Poker Party.
Despite several of Double Down’s top executives leaving the company in recent months, including president Glenn Walcott as well as co-founders Greg Enell and Cooper DuBois, the company retains a large operation in Seattle’s International District.
At the end of the first quarter, IGT reported that social gaming revenues increased 57 percent to $65 million compared to the prior year quarter, primarily driven by an increase in the number of players. Double Down said it has 1.72 million daily active users, a 17 percent increase over the year-ago period. It also said it was contributing to the company’s profitability.
