Light & Wonder Paying $850 Million for Charitable Gaming Assets

• Light & Wonder Paying $850 million for charitable gaming business
• Acquired company is profitable, deal expected to close in second quarter

Light & Wonder (NASDAQ: LNW) said it’s paying $850 million in cash for the charitable gaming assets of Grover Gaming, Inc. and G2 Gaming, Inc. The purchase price could increase to $1.05 billion based on a “a four-year revenue-based earn-out of up to $200 million.”

The initial acquisition prices implies the buyer is paying approximately 7.7x Grover Charitable’s 2024 adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) and about 7.1x the target’s run rate adjusted EBITDA.

Under the terms of the agreement, Garrett will collaborate with Light & Wonder to help drive the continued success of the business over the next three years,” according to a statement.

Light & Wonder expects the transaction to close in the second quarter and noted that upon finalization, the business will be operated by a combination of LNW and Grover Gaming employees.

What L&W Gets with Grover Charitable Acquisition

Charitable gaming features the monetary stakes and potential payouts associated with traditional casino wagering, but it differs in that it’s not operated by a commercial or tribal operator or a government. Rather, it’s run by a charity that farms out gameplay to a company such as Grover. It can be offered in various forms, including lotteries, table games, and slot machines — an area in which Light & Wonder is one of the dominant companies.

“Grover Charitable Gaming has developed long-standing and persistent relationships with charitable customers in the states that it operates, underpinned by a dedicated local team of service technicians and relationship managers,” according to the press release.

Deal terms stipulate that the seller will work with Light & Wonder for three years following closure of the transaction to ensure “the continued success of the business.”

Light & Wonder Says Deal Won’t Expand Leverage

Light & Wonder is financing the acquisition of Grover Charitable with a mix of cash and debt, but the company told investors the purchase isn’t a threat to its goal of keeping leverage in the range of 2.5x-3.5x.

“Light & Wonder reaffirms its 2025 $1.4 billion Consolidated AEBITDA Target underpinned by continued strong organic growth across our existing businesses, and without any AEBITDA contribution from the acquisition of Grover Charitable Gaming,” said the company in the statement.