Light & Wonder (LNW) M&A Announcement summary

Deal rationale and strategic fit

• Acquisition of Grover Gaming's charitable gaming assets expands presence into the high-growth, regulated E-Pull tab and charitable gaming market across five U.S. states, aligning with a cross-platform strategy and mission-driven culture.

• Provides access to a loyal, fragmented customer base and recurring revenue streams, enhancing market reach and supporting community investment.

• Opportunity to leverage existing content, R&D, and technology across Grover's install base, accelerating growth and value creation.

• Strong cultural alignment and leadership continuity expected to facilitate smooth integration and future growth.

Financial terms and conditions

• Total consideration: $850 million cash upfront plus up to $200 million earnout over four years, contingent on revenue targets.

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

• Grover Charitable Gaming generated $135 million in revenue and $111 million Adjusted EBITDA for 2024 (preliminary, unaudited).

• Funded by existing cash and incremental debt; net leverage to remain within 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 of R&D, content, and technology expected to drive revenue synergies and enhance recurring revenue streams.

• Elimination of certain non-recurring distribution costs post-acquisition will improve EBITDA margins.

• Efficient use of existing R&D and hardware assets to maximize ROI and margin consistency.