Greenville’s Grover Gaming has agreed to sell its charitable gambling division to slot machine manufacturer Light & Wonder for total consideration of as much as $1.05 billion. That includes $850 million in cash upon the deal’s closing, and potentially $200 million more depending on achieving certain financial targets through 2028.
Grover is owned by Garrett Blackwelder, an East Carolina University graduate who founded the company 12 years ago. Employing more than 400 people, the company develops software, the content for games such as Piggy’s Big Break, Video Lottery Terminals, and gaming systems for tribal casinos and charitable gaming jurisdictions. Its more than 10,000 leased electronic pull-tab units in North Dakota, Ohio, Virginia, Kentucky and New Hampshire operate under a recurring revenue model.
The sale price is about 7.7 times the company’s adjusted earnings before interest, taxes, depreciation and amortization of $111 million in 2024, according to Bloomberg News.
Grover is selling about half of its operation, while retaining the rest as an independent entity, company officials said. Blackwelder plans to remain with the company.
Electronic pull-tab devices combine bingo and scratch-off lottery tickets, allowing players to win money if they get the right combination of numbers or symbols.
In 2021, Grover said it had raised more than $200 million for charitable organizations such as the Loyal Order of the Moose, Veterans of Foreign Wars and the American Legion, Bloomberg said. The devices are typically located in the lodges of fraternal groups, but some states allow them in bars and restaurants.
Las Vegas-based Light & Wonder said in a statement the purchase will give the company a strong position in a rapidly growing market. It aims to extend its slot-machine titles into online gambling and other types of betting.
Light & Wonder expects the transaction to close by June 30. It was formerly known as Scientific Games before rebranding in 2022.
Grover Gaming employs people in nine states, including a design studio in Wilmington and a software development center in Chicago. Goldman Sachs & Co. is acting as financial adviser to the company.
“Grover Gaming is a leading player in charitable gaming, a category that has experienced significant growth in recent years,” Light & Wonder CEO Matt Wilson said. “This transaction complements our position as the leading cross-platform global games company by adding another compelling regulated adjacency to our profile.”
Blackwelder said, “Light & Wonder is an ideal partner for us, given our similar company cultures and dedication to innovation and customer service.’’
Grover Cheif Development Officer Kevin Morse added, “The real winners are the charities and fraternals in these markets, because of the exciting game content L&W brings to the table. We are excited to see charitable gaming taken to a new level.”
Light & Wonder has a market cap of nearly $9 billion. Shares have gained 5% in the past year and 246% over the past five years.
Goldman Sachs & Co. acted as financial adviser to Grover Gaming, and Morgan, Lewis & Bockius LLP is serving as a legal adviser.
