GGRAsia – Aristocrat to pay US$1.2bln for RMG provider NeoGames

Aristocrat to pay US$1.2bln for RMG provider NeoGames

May 15, 2023 Newsdesk Latest News, Top of the deck, World

Australia-based slot-machine maker and game-content provider Aristocrat Leisure Ltd says it has agreed to acquire online real money gaming (RMG) provider NeoGames SA for AUD1.80 billion (US$1.20 billion). The deal “delivers on Aristocrat’s online RMG strategy and accelerates growth” in the segment, stated the company in a Monday filing.

Aristocrat said it will acquire 100 percent of NeoGames for a cash price of US$29.50 per share, representing “a premium of approximately 104 percent to the three-month volume weighted average price of NeoGames shares” for the period ended May 12.

“The acquisition will be funded with existing cash,” said Aristocrat. The company added that it would “retain a strong balance sheet” after completing the purchase. It said it expected the deal to be “earnings per share before amortisation of acquired intangibles accretive from the first full year of Aristocrat ownership.”

NeoGames is a technology and service supplier to the online RMG industry, offering proprietary technology platforms and a range of value-added services across iLottery, iGaming and online sports betting.

The NeoGames group consists of four complementary online RMG business units, including Pariplay Ltd. The group has over 200 customers across more than 50 regulated markets, according to Aristocrat’s statement.

“Completion of the deal is subject to, among other things, NeoGames shareholder approval and certain regulatory approvals,” stated the Australia-listed firm.

In its filing, Aristocrat said that the board of NeoGames “considers the terms of the acquisition to be fair and has recommended that NeoGames shareholders vote in favour of the acquisition”.

“NeoGames shareholders who hold a total of approximately 20.4 million shares, representing approximately 61 percent of NeoGames’ outstanding shares, have also executed an agreement pursuant to which they will vote in favour of the acquisition,” stated Aristocrat.

Aristocrat has been working to scale up its online RMG segment, having launched a RMG division, called ‘Anaxi’. In February, the company completed the acquisition of Roxor Gaming Ltd, an online RMG supplier based in London, in the United Kingdom.

Aristocrat’s chief executive and managing director, Trevor Croker, was quoted in Monday’s filing as saying: “Bringing together NeoGames and our growing Anaxi business will position Aristocrat with global scale and capability in the growing online RMG industry.”

He added: “Through the acquisition of NeoGames and its industry-leading global online RMG platform, this transaction will deliver on our strategy by providing a portfolio of end-to-end solutions for iGaming, iLottery and online sports betting operators globally.”

Aristocrat also said the acquisition would accelerate its growth strategy and deliver a number of “strategic benefits”, including: positioning Aristocrat with global scale and capability in the online RMG segment; delivering “material revenue opportunities”; creating “significant” international growth opportunities; and providing an entry into the iLottery market.

On Monday, Aristocrat also announced that it was further increasing its on-market share buy-back programme by up to AUD500 million, bringing the total programme size to up to AUD1.50 billion. The share buy-back is to run until May 31, 2024.