Light & Wonder Buys Grover Gaming in All-Cash Deal
Expertise: Global Gaming, Asia Gaming, US Gaming, Sports Gambling
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Founded in 2013 and led by CEO Garrett Blackwelder, Grover Gaming operates an electronic pull-tab gaming system that is active in several states, including North Dakota, Virginia, Ohio, New Hampshire, and Kentucky. The company follows a recurring-revenue model and holds gaming licenses in additional jurisdictions such as South Dakota, Montana, West Virginia, Washington and others. Financial reports from Deutsche Bank indicate that in 2024, Grover Gaming generated $135 million in net revenue and had a cash flow of $111 million.
The valuation of the acquisition is based on a 7.1-times multiple of Grover Gaming’s cash flow. Light & Wonder intends to fund the purchase through a combination of existing cash and debt financing. Analysts at Deutsche Bank estimate that after the acquisition, the company’s financial leverage will remain below 3.5 times its cash flow, compared to its current debt-to-cash flow ratio of 2.9 times.
David Katz, an analyst at Jefferies Equity Research, stated that the acquisition will add value to Light & Wonder’s portfolio by introducing a new market segment while supporting growth and maintaining financial leverage within expected limits.
The Transitioning iGaming Market
Katz also noted that the acquisition is aligned with market trends and does not negatively affect Light & Wonder’s financial outlook. He highlighted the rise of charitable gaming as a growing sector in contrast to the slower expansion of traditional Class III slot gaming.
The analyst further pointed out that this acquisition will allow Light & Wonder to optimize its research and development initiatives while reinforcing its corporate infrastructure. Grover Gaming’s projected cash-flow margin of 82 percent exceeds that of any other division within Light & Wonder, making it a highly profitable addition to the company’s operations.
As part of the acquisition terms, Grover Gaming’s CEO, Garrett Blackwelder, will remain with the company for four years in a consulting role to assist with the transition. The deal is expected to close in the spring of 2025, pending regulatory approvals and other standard closing conditions.
Light & Wonder CEO Matt Wilson emphasized that Grover Gaming has established itself as a leader in the charitable gaming industry, a sector that has seen substantial growth in recent years. He stated that this acquisition enhances Light & Wonder’s position as a global cross-platform gaming company, adding another regulated market to its business portfolio.
Goldman Sachs served as the financial advisor for the transaction. Light & Wonder is expected to share further details regarding the acquisition during an investor call scheduled for later on Tuesday.
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