WYOMISSING, Pa. & SAN FRANCISCO--(BUSINESS WIRE)--Aug. 3, 2016--
Penn National Gaming, Inc. (PENN: Nasdaq) (“Penn National” or the
“Company”) announced today that it acquired Rocket Games, Inc.
(“Rocket”), a leading developer of social casino games, for
approximately $60 million cash, subject to working capital and other
adjustments, including potential earn-out payments for certain members
of the Rocket Games management team. The earn-out payments over the next
two years will be based on a multiple of 6.25 times Rocket’s
then-trailing twelve month earnings before interest, taxes, depreciation
and amortization (“EBITDA”), subject to a cap of $110 million for the
earn-out. The transaction is expected to be immediately accretive to
Penn National’s operating results.
Founded in 2013 by game developers Bill Gelpi (Chief Executive Officer)
and Steven Jian (Chief Technology Officer), the management team was
rounded out in 2014 by fellow Zynga veterans Niko Vuori (Chief Operating
Officer) and Justin Cooper (Chief Content Officer). Today Rocket has a
team of over 30 employees based in its San Francisco office. Rocket was
recognized by industry experts Eilers & Krejcik Gaming as the fastest
growing social casino company in 2015, growing by over 500% and reaching
a top-15 position globally in the growing social casino gaming segment,
partially based on its leadership position in the rapidly growing
classic 3-reel mechanical slots genre (3RM). Rocket generated
approximately $5.6 million of operating EBITDA during the six month
period ended June 30, 2016.
Rocket’s library of over 50 social casino games feature hits such as Viva
Slots Las Vegas, Downtown Deluxe Slots, Triple Double Slots
and Vegas Jackpot Casino, along with popular licensed titles such
as Popeye Classic Slots. Rocket’s social slot games are available
on the iTunes App Store, the Google Play store, on Amazon and via
Facebook. Following the transaction Rocket will continue to be
headquartered in San Francisco and its existing management team will
continue to run day-to-day operations.
Penn National Gaming President and CEO, Timothy J. Wilmott, commented,
“Penn National’s accretive acquisition of Rocket highlights our ongoing
strategic initiative to acquire emerging growth platforms that
complement, and allow us to leverage, our core regional gaming
operations and database of over three million active customers.
“Since the separation of our gaming assets from our real estate assets
in 2013 we have been highly focused on a broad range of growth and
diversification initiatives. Launched last year, Penn National’s Hollywoodcasino.com
and Hollywoodslots.com
social casino offerings have been very well received by players, are
profitable and serve as effective customer acquisition tools for our
operations. Based on our internal analysis, a significant segment of
Penn National’s database customers actively participate in social and
online gaming, and we believe there are meaningful operating and revenue
synergies between Penn National’s operations, our Hollywoodcasino.com
and Hollywoodslots.com social casino offerings and Rocket’s operations
that will drive near- and long-term growth for our shareholders.”
Chris Sheffield, Senior Vice President and Managing Director of iGaming
at Penn National Gaming, added, “We are excited to acquire a
best-in-class social casino game developer in a transaction that greatly
expands our in-house capabilities and further diversifies our portfolio
of leading gaming entertainment assets. Rocket’s growth and industry and
consumer acclaim over the past 12 months is impressive given their lack
of funding from outside investors or access to the resources and
experience of an established casino operator.
“Rocket’s flagship game ‘Viva Slots Vegas’ is mobile casino gaming’s
‘classic slots’ leader, having attracted a growing audience of over
200,000 average daily active players, and we believe Rocket provides
Penn National with an effective platform to further cross promote our
already successful social and online operations as well as our existing
portfolio of regional gaming properties.
“Our internal research confirms that social and online gaming is highly
complementary to our core regional gaming operations and a key component
of our gaming entertainment offerings whose importance grows each day.
This acquisition will provide a highly accomplished team, content and
platform to rapidly grow our footprint in this space and engage with our
customers, building loyalty and retention while serving as a significant
channel for new customer acquisition.”
Bill Gelpi, Chief Executive Officer of Rocket, added, “The entire Rocket
team is delighted to join the Penn National family and leverage their
expertise and nationwide reach to take our game development capabilities
and company growth to the next level. Social and online gaming is an
extremely attractive segment of mobile and online gaming, and tying our
innovative gaming expertise to a traditional casino operator with a
qualified database of customers will create unmatched opportunities for
both Rocket Games and Penn National.”
About Penn National Gaming
Penn National Gaming owns, operates or has ownership interests in gaming
and racing facilities and video gaming terminal operations with a focus
on slot machine entertainment. At June 30, 2016, the Company operated
twenty-seven facilities in seventeen jurisdictions, including Florida,
Illinois, Indiana, Kansas, Maine, Massachusetts, Maryland, Mississippi,
Missouri, Nevada, New Jersey, New Mexico, Ohio, Pennsylvania, Texas,
West Virginia, and Ontario. At June 30, 2016, in aggregate, Penn
National Gaming operated approximately 33,400 gaming machines, 800 table
games and 4,600 hotel rooms.
Penn Interactive Ventures (PIV) is the interactive division of Penn
National Gaming operating out the Company’s offices in Conshohocken, a
suburb of Philadelphia. The business markets and supports a portfolio of
innovative iGaming products including www.hollywoodcasino.com
(online and mobile free slot games provided by Scientific Games), HollywoodSlots.com
(Mobile and Facebook social free casino apps developed by OpenWager) and Hollywoodraces.com
(an advance deposit wagering platform provided by Sportech PLC).
About Rocket Games
Developing for online, social and mobile markets, Rocket Games is a
social casino game developer operating primarily in the North American
market. The company, founded in 2013, is based out of San Francisco and
operates a portfolio of over 50 slots titles. With more than 800,000
daily active players, Rocket Games is one of the largest independent
social casino game developers in the world. For further information
visit http://rocketgames.com
or http://vivaslots.com
or Twitter: @rocketgames
Forward-Looking Statements
This press release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. These
statements can be identified by the use of forward looking terminology
such as “expects,” “believes,” “estimates,” “projects,” “intends,”
“plans,” “seeks,” “may,” “will,” “should” or “anticipates” or the
negative or other variations of these or similar words, or by
discussions of future events, strategies or risks and uncertainties,
including future plans, strategies, performance, developments,
acquisitions, capital expenditures, and operating results. Actual
results may vary materially from expectations. These forward looking
statements are inherently subject to risks, uncertainties and
assumptions about Penn National Gaming and its subsidiaries, including
risks related to the continued profitability of Rocket and our other
social gaming endeavors, the retention of certain key employees, cyber
security, data privacy, intellectual property rights, and legal and
regulatory challenges, and, accordingly, any forward looking statements
are qualified in their entirety by reference to the factors discussed in
the Company’s Annual Report on Form 10-K for the year ended December 31,
2015, as well as any subsequent Quarterly Reports on Form 10-Q and
Current Reports on Form 8-K, each as filed with the United States
Securities and Exchange Commission. The Company does not intend to
update publicly any forward-looking statements except as required by
law. In light of these risks, uncertainties and assumptions, the
forward-looking events discussed in this press release may not occur.
View source version on businesswire.com: http://www.businesswire.com/news/home/20160803005484/en/
Source: Penn National Gaming, Inc.
Penn National Gaming, Inc.
Saul V. Reibstein, 610-401-2049
Chief
Financial Officer
or
JCIR
Joseph N. Jaffoni, Richard Land
212-835-8500
penn@jcir.com
