Light & Wonder (LNW) M&A Announcement summary

Deal rationale and strategic fit

• Acquisition of Grover Gaming's charitable gaming assets expands into the fast-growing, regulated E-Pull tab and charitable gaming market in North America, supporting a cross-platform strategy.

• Provides access to a loyal, fragmented customer base and recurring revenue streams, enhancing market reach and leveraging content and technology strengths.

• Aligns with a mission-driven culture focused on growth, quality, and community impact, with strong cultural fit expected to facilitate integration.

• Leverages existing R&D investment to accelerate content deployment and recurring revenue growth.

• Entry into charitable gaming broadens the total addressable market and supports future organic and geographic expansion.

Financial terms and conditions

• Total consideration is $850 million in cash upfront, plus up to $200 million in earnouts over four years based on revenue targets.

• Upfront payment represents ~7.7x 2024 Grover Adjusted EBITDA and ~7.1x Grover Run Rate Adjusted EBITDA.

• Grover generated $135 million in 2024 revenue and $111 million in Adjusted EBITDA (82% margin, preliminary, unaudited).

• Acquisition will be funded by cash on hand and incremental debt, with net leverage expected to remain within the 2.5–3.5x target range.

• High single-digit Adjusted NPATA per share accretion anticipated in the first full calendar year post-acquisition.

Synergies and expected cost savings

• Integration will enable deployment of leading game content and hardware across Grover's installed base, driving revenue synergies.

• Value creation opportunities through cross-platform content distribution and technology integration.

• Certain non-recurring distribution costs are expected to be eliminated post-acquisition, enhancing EBITDA margins.

• Leveraging existing R&D and infrastructure is expected to sustain high margins and cash flow conversion.