DoubleDown Interactive to acquire German social casino developer WHOW

SEOUL - DoubleDown Interactive Co., Ltd. (NASDAQ:DDI), a company currently trading at attractive valuations with a P/E ratio of 3.71, announced Tuesday it has entered into an agreement to acquire WHOW Games GmbH, a German social casino developer, for an initial consideration of €55 million ($64.7 million). According to InvestingPro data, the company maintains a strong financial position with a healthy balance sheet and more cash than debt.

The acquisition from Azerion Tech Holding B.V. includes potential additional earn-out payments of up to €10 million, contingent upon WHOW Games meeting performance targets over the first two years following the closing.

DoubleDown will finance the purchase through its existing cash reserves, with the transaction expected to close during the third quarter of 2025.

WHOW Games, headquartered in Hamburg, reported unaudited calendar 2024 revenue of €41.8 million. The company operates a portfolio of social casino applications including proprietary brands MyJackpot and Lounge777, as well as third-party labeled offerings such as Merkur24 through licensing agreements with brick-and-mortar casino companies. DoubleDown itself maintains a strong gross profit margin of 70.22%, demonstrating operational efficiency in the social casino space.

"This acquisition marks a significant step toward increasing our competitiveness in the growing German social casino market," said In Keuk Kim, Chief Executive Officer of DoubleDown Interactive.

The deal aims to strengthen DoubleDown’s presence in the European social casino market, particularly in Germany, where WHOW Games has established operations. According to the company’s statement, the European social casino market grew in 2023 and 2024 compared to the overall market.

Giovanni Valerio Valeriota, CEO of WHOW Games, expressed enthusiasm about joining DoubleDown, noting that the partnership would accelerate growth and innovation.

The announcement was made in a press release statement from DoubleDown Interactive.

In other recent news, DoubleDown Interactive has been the subject of multiple analyst evaluations and a notable secondary offering. Texas Capital Securities initiated coverage on the company with a Buy rating and a $20 price target, emphasizing DoubleDown’s strong financial position and significant free cash flow. Roth/MKM also started coverage with a Buy rating, setting a $16 price target and highlighting the company’s substantial net cash position relative to its market capitalization. Both firms noted potential for value growth through acquisitions or capital returns.

Additionally, DoubleDown Interactive announced the pricing of a secondary offering by STIC Special Situation Diamond Limited, involving 4,347,827 American Depositary Shares (ADSs) at $8.50 per ADS. The offering is expected to close around June 13, 2025, and consists solely of existing shares, meaning the company will not receive any proceeds. Roth Capital Partners and Texas Capital Securities are managing the offering. This development reflects recent strategic moves by the company and its stakeholders.

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