Light & Wonder Announces Strategic Acquisition of Grover Gaming’s Charitable Gaming Assets

• Grover Charitable Gaming is a leading provider of electronic pull-tabs for charitable gaming in the U.S., with over 10,000 installed recurring revenue[1] units across five U.S. states
  
  
• Opportunity to leverage L&W’s leading land-based content into a scale recurring revenue¹ base
  
  
• Highly cash generative earnings profile with strong underlying growth
  
  
• Highly accretive to value and earnings with high-single digit Adjusted NPATA per share accretion[2]

LAS VEGAS, February 18, 2025 – Light & Wonder, Inc. (NASDAQ and ASX: LNW) (together with its subsidiaries “Light & Wonder,” “L&W” or the “Company”) today announced that it has entered into a definitive agreement to acquire the charitable gaming assets (“Grover Charitable Gaming”) of Grover Gaming, Inc. and G2 Gaming, Inc. (together, “Grover Gaming”) for total consideration of $850 million cash, subject to customary purchase price adjustments, and a four-year revenue based earn-out of up to $200 million cash. Upfront consideration implies a multiple of ~7.7x based on 2024 Grover Adjusted EBITDA² and a ~7.1x multiple based on Grover Run Rate Adjusted EBITDA^2,[3].

Overview of Grover Charitable Gaming

Privately owned by Garrett Blackwelder, Grover Charitable Gaming has an installed base of over 10,000 leased electronic pull-tab units across five U.S. States (ND, OH, VA, KY, NH) operating under a recurring revenue¹ model. The business was founded in 2013 and is headquartered in Greenville, North Carolina.

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.

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.

For the year ended December 31, 2024, on an unaudited and preliminary basis, Grover Charitable Gaming generated Revenue of $135 million and Grover Adjusted EBITDA² of $111 million.

The Company expects the transaction to close during the second quarter of 2025, subject to required regulatory and other approvals and customary closing conditions.

Strategic Rationale

The acquisition of Grover Charitable Gaming provides several strategic and financial benefits for L&W shareholders:

• A leading position in the fast-growing charitable gaming space and a best-in-class supplier in every state it operates across
  
  
• Transaction complements L&W’s cross-platform strategy, by expanding into another high-growth, regulated adjacency in which L&W is not currently a participant
  
  
• Loyal customer base is supported by strong customer relationships tied to in-market local teams
  
  
• Strong cultural alignment which will facilitate a smooth transition and integration
  
  
• Attractive financial profile which is expected to be highly accretive to value and earnings with high-single digit Adjusted NPATA per share[4] accretion in the first full calendar year post acquisition.

Post acquisition, Light & Wonder will operate the business with a combination of Grover Gaming and Light & Wonder employees.

“Grover Gaming is a leading player in charitable gaming, a category that has experienced significant growth in recent years,” said Matt Wilson, President and Chief Executive Officer of Light & Wonder. “This transaction complements our position as the leading cross-platform global games company by adding another compelling regulated adjacency to our profile.”

“Importantly, there are exciting incremental revenue opportunities to be realized by leveraging Light & Wonder’s proven land-based gaming content to a new and loyal customer base. We look forward to continuing to partner with Grover Gaming’s customers, building on its strong dedication to customer service,” Mr. Wilson concluded.

“I am very thankful for all of our Grover Gaming teammates and how hard they work every day," said Garrett Blackwelder, CEO and Founder of Grover Gaming. "I'm also grateful for our customers' loyalty over the past two decades. We realize without them, we wouldn't be where we are today. Light & Wonder is an ideal partner for us, given our similar company cultures and dedication to innovation and customer service. We are excited to see Charitable Gaming taken to a new level!" 

Acquisition funding

Light & Wonder expects to fund the acquisition with existing cash and incremental debt financing. Post-acquisition, Light & Wonder expects its net debt leverage ratio[5] on a combined basis to remain within its target range of 2.5x-3.5x.

Consolidated AEBITDA Target

Light & Wonder reaffirms its 2025 $1.4 billion Consolidated AEBITDA Target[6] underpinned by continued strong organic growth across our existing businesses, and without any AEBITDA contribution from the acquisition of Grover Charitable Gaming.

Advisors 

Jarden Group is serving as financial advisor and Cravath, Swaine & Moore LLP is serving as legal advisor to Light & Wonder.

Investor conference call

An investor conference call is scheduled for:

February 18, 2025
5:30pm U.S. Eastern Time / 2:30pm U.S. Pacific Time

February 19, 2025
9:30am Australian Eastern Daylight Time

Telephone Dial-in

US Toll Free: +1 (833) 470-1428
Australia: +61 2 7908 3093
International: +1 (404) 975-4839
Access Code: 690757

Webcast

Participants are encouraged to pre-register for the conference call by using the following link. To pre-register, click here: Light & Wonder Grover Gaming Acquisition Call

The conference call will be webcast live at https://explore.investors.lnw.com where a recording of the webcast will also be made available following the event.

Investor Day

Light & Wonder will also be hosting an Investor Day on May 20, 2025 in New York where we will highlight our future growth initiatives across each of our businesses.

For more information, visit lnw.com.

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[1] Refers to revenue participation model.

[2] Denotes a non-GAAP financial measure based on preliminary and unaudited financial information. Additional information on non-GAAP financial measures presented herein is available at the end of this release.

[3] Grover Run Rate Adjusted EBITDA is derived from Grover Adjusted EBITDA and further adjusts such measure to provide full-year revenue on a run rate basis of ending installed units multiplied by an average rate per day and Grover Adjusted EBITDA margin rate for December 31, 2024. Grover Run Rate Adjusted EBITDA does not include adjustments to reflect assumed start-up and other costs that might be incurred post-closing.

[4] Denotes a non-GAAP financial measure based on preliminary and unaudited financial information. Additional information on non-GAAP financial measures presented herein is available at the end of this release.

[5] Calculated on a combined basis assuming a full year contribution of earnings. Additional information on non-GAAP financial measures presented herein is available at the end of this release.

[6] Consolidated AEBITDA Target is a forward-looking non-GAAP financial measure presented on a supplemental basis. Additional information on non-GAAP financial measures presented herein is available at the end of this release.