Light & Wonder, Inc. (NASDAQ:LNW), a leader in computer integrated systems design, has entered into a material definitive agreement securing a new credit facility. On Thursday, May 15, 2025, the Nevada-based organization, through its subsidiary Light and Wonder International, Inc. (LNWI), established an $800 million Term Loan A Facility with JPMorgan Chase (NYSE:JPM) Bank, N.A. as the administrative and collateral agent.
This financial maneuver is aimed at supporting the company’s acquisition of the charitable gaming business from Grover Gaming, Inc., a transaction valued at $850 million with additional future considerations. The acquisition aligns with Light & Wonder’s growth strategy, which has already yielded a 7.3% revenue growth in the last twelve months.
The Term Loan A Facility, which matures on May 15, 2028, is backed by the assets of both LNWI and Light & Wonder, Inc., along with their material domestic subsidiaries.
The credit agreement stipulates quarterly amortizations, beginning with 0.625% of the principal amount for the first year, followed by 1.25% for subsequent quarters. The first payment is scheduled for the quarter ending September 30, 2025. Interest rates are set at either the Adjusted Term SOFR Rate plus 1.75% or a base rate plus 0.75%, at LNWI’s discretion.
Furthermore, the agreement includes a financial covenant that requires the company to maintain a maximum consolidated net first lien leverage ratio of 4.50:1.00, to be assessed at the end of each fiscal quarter.
The acquisition of Grover Gaming’s charitable gaming business was completed on Friday, May 16, 2025, and involved a cash payment of $850.0 million, subject to customary adjustments, along with a four-year revenue-based earn-out of up to $200.0 million.
In other recent news, Light & Wonder reported first-quarter earnings that did not meet analyst expectations, with adjusted earnings per share at $0.94, below the projected $1.11. The company also reported revenue of $774 million, falling short of the anticipated $807 million. Despite this, Light & Wonder achieved its 16th consecutive quarter of year-over-year revenue growth, with a 4% rise in Gaming revenue to $495 million. However, SciPlay (NASDAQ:SCPL) revenue saw a 2% decline to $202 million.
Benchmark analysts responded by lowering their price target for Light & Wonder to $100, while maintaining a Buy rating, citing the company’s slower top-line growth. Meanwhile, Stifel analysts raised their price target to $95 from $84, maintaining a Hold rating due to robust North American replacement sales and margin improvements. The company continues to aim for a full-year 2025 AEBITDA target of $1.4 billion, consistent with the consensus estimate.
