The year of major deals continues. American Churchill Downs Incorporated, engaged in a wide range of gambling and horse racing, is in the process of buying Big Fish Games. The transaction amount may reach $885 million.
Upfront for Big Fish Games will give $ 445 million. Whether the company will receive another $350 million will depend on its financial results for 2015. The founder and CEO of Big Fish, Paul Thelen, can also receive a $50 million bonus if the company reaches a certain level of revenue by the end of 2016.
Adjusted EBITDA (an indicator equal to the volume of profit before taxes, depreciation and amortization expenses and interest on loans) Big Fish Games for the 12 months ending September 30, 2014, amounted to $57.3 million. It was this indicator that was used to calculate the prepayment. The future payment will be calculated by a nine-fold multiplication of the adjusted EBITDA for calendar year 2015.
For Churchill Downs Inc, which owns five racetracks, six casinos, an online betting business, video poker sites, sweepstakes, buying Big Fish, positioning itself as the world’s largest producer and distributor of casual games, is entering new markets (including mobile) and gaining access to a wide audience both inside, so it is outside the States.
Why is it Big Fish? Mobile traffic is getting more expensive. Competing with billionaire competitors, which today include King and Supercell, is becoming increasingly difficult. The sale of the company gives Big Fish the necessary funds to promote its own products, plus, possibly, partnership programs with the real gambling business of Churchill Downs Inc.
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- Big Fish sales totaled $275 million last yearBig Fish Casino – the highest-grossing casino in the world
- Big Fish – formerly Big Fish Games – is a pioneer of the casual market.
The company started as a distributor of casual projects. She distributed them through her own website (a kind of miniature App Store). At the moment, Big Fish has been trying to transform itself into a publisher of mobile and social games for many years with varying success.