Aristocrat Leisure is buying social gaming company Big Fish Games for US$990m in cash from Churchill Downs, a global publisher of free-to-play games that operates across three key business lines that are focused on specific game segments, including Social Casino, Social Gaming and Premium Paid games. Big Fish is headquartered in Seattle, USA, has approximately 700 full-time employees and five in-house development studios in Seattle and Oakland, USA.
Big Fish has a number of key profitable applications, as well as a strong pipeline of new applications. Big Fish’s largest social casino application, Big Fish Casino, remains a top ranking social casino application globally with industry leading user monetisation levels.
Big Fish’s social gaming hit titles, Gummy Drop! and Fairway Solitaire, are ranked the number ten and number six games in the casual and card game categories, respectively.
Big Fish’s success has been driven by its digital-first content creation, meta-game capability, 3rd party developer network and multi-app strategy. It has also been underpinned by a deep game development talent pool and leadership team that has successfully scaled the business. For the 12 months ending 30 September 2017 Big Fish generated adjusted revenue of US$458m and adjusted EBITDA of US$83m. As a result of the Big Fish transaction, Digital revenue contribution increases significantly from 24%, pro-forma for the acquisition of Plarium, to 38 per cent for the year ended 30 September 2017.
The acquisition of Big Fish is expected to be EPSA accretive in the first full year of ownership. Big Fish’s key game development talent and leadership team have entered into non-compete and retention arrangements with Aristocrat.
Big Fish will operate as a standalone business alongside Product Madness and Plarium, minimising scope for disruption to Aristocrat’s existing businesses. The transaction is subject to regulatory and other approvals, and customary closing conditions. The transaction is expected to complete in the first quarter of calendar year 2018. Under the sale and purchase agreement, Big Fish and Churchill Downs have made representations, warranties and covenants customary for a transaction of this type.
Chief Executive Officer and Managing Director of Aristocrat, Trevor Croker said: “The strategic and financial benefits from the acquisition are highly compelling. The acquisition of Big Fish will immediately provide scale across our entire Digital platform, following the recent acquisition of Plarium, which expanded our Digital business into the fast growing social gaming market. Our Digital revenues approximately double from A$651 million, pro-forma for the acquisition of Plarium, to A$1.3 billion for the year ended 30 September 2017.”
“Our Social Casino business will become the second largest Social Casino publisher globally, with revenues increasing from A$383 million to A$641 million for the year ended 30 September 20176. Big Fish’s digital-first social casino content and industry-leading meta-game capability and applications are highly complementary to Aristocrat’s existing and industry-leading land based digital content business.”
“The acquisition of Big Fish will also materially expand our social gaming footprint, positioning Aristocrat to further capitalise on growth in mobile gaming following the acquisition of Plarium. Big Fish’s strength in casual and card games is highly complementary to Plarium’s strategy games portfolio.”
“We are excited to work with the Big Fish team to take advantage of the opportunities this combination will create, and look forward to welcoming them to the Aristocrat family. Through continued optimisation of Big Fish’s existing successful applications, together with Big Fish’s attractive pipeline of new titles across both Social Casino and Social Gaming, this transaction ideally positions us to capitalise on the positive growth outlook in each of these markets,” Mr Croker concluded.