Churchill Downs is selling its Big Fish social games division to Aristocrat Technologies for $990 million in cash, marking the latest marquee deal involving social casinos.
“Big Fish is a very successful business with a bright future that will be best realized by being part of Aristocrat’s strategy and vision for their online and mobile gaming portfolio. We thank our team members at Big Fish for their outstanding efforts over the three years since CDI acquired Big Fish,” Bill Carstanjen, chief executive officer of Churchill Downs, said in a statement Wednesday afternoon.
The move comes less than three years after Big Fish Games was first acquired by Churchill Downs, December 2014.
The announced sale is the latest in a flurry of wheeling and dealing that has taken place in the social casino space over the past year.
Last April, International Game Technology sold its DoubleDown social games business to a South Korean company for $825 million. In the summer of 2016, Caesars sold Playtika to Chinese investors for $4.4 billion.
Big Fish, which offers three segments of games ranging from social casino to casual and mid-core to premium, has generated mixed performances in recent quarters, with revenues, EBITDA and bookings failing to generate sustainable lift.
For the third quarter, Big Fish revenues were down by $4.4 million year-over-year and EBITDA declined by $10.2 million. These results came despite an $9.1 million increase in revenues from the social casino segment, indicating that Big Fish was having trouble retaining and monetizing customers at the higher buy-in levels.
Churchill’s acquisition of Big Fish in 2014 gave it “new products, new customers, new geographies and new sizeable growth opportunities,” Carstanjen said at the time. But with the sale, the company will recalibrate and devote more resources to its bread and butter operations.
“We will refocus our strategy on our core assets and capabilities including growing the Kentucky Derby, expanding the casino segment, TwinSpires.com and other forms of real money gaming, and maximizing our thoroughbred racing operations,” Carstanjen explained.
For Aristocrat, the deal marks the Australian company’s second major social gaming deal in the second half of 2017. In August, it acquired Plarium, an Israeli social game developer, for $500 million.
“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,” said Trevor Croker, chief executive officer of Aristocrat.
The acquisition is scheduled to be fully approved in the first quarter of 2018 upon meeting standard regulatory approvals and closing conditions.
