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NeoGames SA has announced that it has reached an agreement with Aristocrat Entertainment which will see the latter acquire the B2B betting and gaming solutions provider.
Due to be conducted at a price of £29.50 per NeoGames share, the business combination agreement values the NASDAQ-listed company at $1.2bn, and represents a 104% premium over the volume weighted average price of NeoGames shares for the three months ending on 12 May 2023.
NeoGames’ Board of Directors unanimously approved the takeover, although the firm must still secure the approval of shareholders as well as relevant regulatory approvals for the M&A to be fully completed.
Moti Malul, NeoGames CEO, said: “I am tremendously proud of our entire team at NeoGames, as together we have established our leadership position, driving our success across iLottery, iGaming, and online sports betting.
“We are delighted that the team at Aristocrat recognizes the significance of what we have built, and the strategic opportunity to combine our complementary businesses. We firmly believe that this Transaction represents a great outcome for all of NeoGames’ shareholders, customers and employees.”
As it stands, however, NeoGames shareholders with approximately 20,382,242 shares, representing around 61% of total shares, have executed a support agreement with Aristocrat to ‘irrevocably’ approve the deal.
Dependent on the approval of remaining shareholders – votes from at least 66.7% are needed to move the M&A forward – and clearing of regulatory hurdles, NeoGames expects the transaction to occur ‘within 12 months’.
Following completion of the transaction, NeoGames will transfer its statutory seat, registered office and seat of central administration from its current base of Luxembourg to the Cayman Islands.
The most significant structural development will see an as-yet-unnamed ‘wholly owned subsidiary’ of Aristocrat ‘merge with and into’ NeoGames, leaving the firm as the surviving company as part of its new parent firm’s wider portfolio.
ASX-listed games development company Aristocrat confirmed in a presentation to its investors that the takeover will be funded with its ‘existing cash or balance sheet’, whilst adding that following the acquisition AUS$500m will be added to its existing on-market share buy-back programme, increasing its size to $1.5bn.
In its evaluation of Aristocrat’s holdings, NeoGames highlighted the company’s flagship ilottery unit with 2022 Total Addressable Market (TAM) of US$11bn, BtoBet sportsbook with TAM of US$48bn, igaming platform Pariplay with TAM of US$22bn and igamng and OSB service AspireCore with TAM of US$70bn.
The inclusion of the BtoBet, AspireCore and Pariplay brands – which were themselves acquired by NeoGames in August 2022 via its takeover of Aspire Global $480m – will significantly expand Aristocrat’s product range.
The takeover also fulfils a long-term ambition of Aristocrat Leisure to integrate a B2B betting and igaming provider into its business, following an unsuccessful £2.7bn takeover of London-based firm Playtech back in early 2022.
John E. Taylor, Jr., Chairman of the Board of Directors of NeoGames, said: “The NeoGames team has built a great company with a strong platform and differentiated assets and we are pleased that Aristocrat recognises the value we’ve created as a leader across iLottery, iGaming and online sports betting.
“After careful consideration, the Board determined that Aristocrat’s proposal provides shareholders with compelling value, further validating the strength of the business that NeoGames has built. We are pleased to have reached this agreement, which we believe benefits all of NeoGames’ shareholders as well as our various stakeholders.”
