WYOMISSING, Pa. & SAN FRANCISCO–(BUSINESS WIRE)–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 Slotsand 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.