Edit Symbol List
Enter up to 25 symbols separated by commas or spaces in the text box below. These symbols will be available during your session for use on applicable pages.
Don't know the stock symbol? Use the
Symbol Lookup tool.
Alphabetize the sort order of my symbols
Investing just got easier…
Sign up now to become a NASDAQ.com member and begin receiving instant notifications when key events occur that affect the stocks you follow.Access Now X
International Game Technology (IGT)
January 13, 2012 8:00 am ET
Patrick W. Cavanaugh - Chief Financial Officer, Principal Accounting Officer, Executive Vice President and Treasurer
Matthew G. Moyer - Vice President of Investor Relations
Patti S. Hart - Chief Executive Officer, Lead Independent Director and Member of Stock Award Committee
Edward S. Williams - BMO Capital Markets U.S.
Harry Curtis - Nomura Securities Co. Ltd., Research Division
Ryan L. Worst - Brean Murray, Carret & Co., LLC, Research Division
Chad Beynon - Macquarie Research
Robin M. Farley - UBS Investment Bank, Research Division
Dennis I. Forst - KeyBanc Capital Markets Inc., Research Division
Joseph Greff - JP Morgan Chase & Co, Research Division
Jeffrey Linn Gates - Gates Capital Management, Inc.
Carlo Santarelli - Deutsche Bank AG, Research Division
Mark Strawn - Morgan Stanley, Research Division
Cameron McKnight - Wells Fargo Securities, LLC, Research Division
William J. Lerner - Deutsche Bank AG, Research Division
Previous Statements by IGT
» International Game Technology Management Discusses Q4 2011 Results - Earnings Call Transcript
» International Game Technology Management Discusses Q3 2011 Results - Earnings Call Transcript
» International Game Technology's CEO Discusses Q2 2011 Results - Earnings Call Transcript
Matthew G. Moyer
Thanks, Kim. Good morning, everyone, and welcome to IGT's Conference Call regarding the acquisition of Double Down. On the call today are Patti Hart, CEO; and Pat Cavanaugh, CFO.
Before we begin, I'd like to remind listeners, our discussion will contain forward-looking statements concerning the proposed acquisition of Double Down that involve risks and uncertainties. Actual events or results may differ materially from those described in our discussion due to a number of risks and uncertainties. Information about potential factors that could affect IGT's business and financial results are included in our filings with the SEC, including our most recent annual report on Form 10-K and in our press release relating to the Double Down acquisition. All information discussed in this call is as of today, January 13, 2012, and IGT does not intend and undertakes no obligation to update this information to reflect future events or circumstances. With that in mind, I'll turn over the call to Patti.
Patti S. Hart
Thanks, Matt, and thanks to all of you for taking time to join us this morning. Yesterday, we announced our entry into the rapidly growing world of social gaming with our agreement to acquire Double Down Interactive. Double Down is the developer of the world's leading virtual casino found on Facebook. This investment is consistent with our strategic objective to lead the wave of change coming to gaming around the globe. We have always delivered products and innovation across all available distribution channels with the end player experience in mind. The acquisition of Double Down is consistent with our historic approach and allows our games to be accessible to the broader space of players in all relevant format and across all leading edge outlets. The addition of Double Down further solidifies our interactive gaming leadership and is compelling for the future growth of IGT. With more than 1 million daily active users, DoubleDown Casino is attracting more than 10x the average number of daily visitors to Las Vegas, while also delivering positive adjusted EBITDA and is adding users and growing revenues at impressive rates. We will operate Double Down with a level of independence necessary to continue to foster exceptional growth. This transaction marks another important step towards the execution of our plan to prioritize higher growth opportunities that we believe will result in strong returns for our shareholders. The combination of IGT and Double Down is compelling for both companies, but also for gamers around the world and our stakeholders. I'll now turn the call over to Pat.
Patrick W. Cavanaugh
Thanks, Patti, and good morning everyone. As we indicated in our press release, our definitive agreement to acquire Double Down is for a total consideration that includes $250 million paid out in cash, $85 million paid out in retention payments over 2 years and up to $165 million that could be earned subject to the company meeting certain financial performance targets over the next 3 years. The final purchase price is subject to customary post-closing adjustments and is expected to close within this fiscal quarter. The transaction was priced to reflect the value that IGT identified in Double Down based on a variety of factors, including growth rates of the company, financial performance, technology and competency of senior management and is in line with comparable valuations. We expect Double Down to be accretive in our fiscal 2012 adjusted earnings. However, currently it is too early to accurately determine the size of the potential accretion. We currently anticipate including Double Down in our interactive revenues, which are accounted for in our gaming operations line of business. At this time, we are not changing our fiscal 2012 adjusted earnings guidance. With that, I'd now like to turn the call over for questions. Operator?
[Operator Instructions] And our first question comes from Joe Greff with JPMorgan.
Joseph Greff - JP Morgan Chase & Co, Research Division
Pat, Patti, Matt, if you can talk a little with the background of this deal, how was this deal sourced? Was it the competitive situation? You talked about the valuation is in line with some other comparable transactions. Can you help us understand those transactions or what you looked at on a comparative-valuation basis? And then, when you think of strategically what this does for you, what are the returns if this is just a platform for social gaming? And if you can talk about how this might interface with an effort for online poker or online gaming subject to obviously the legislation being passed and all that good stuff?