09/05/23
Australia’s Aristocrat to Complete NeoGames Takeover in $1.8 Billion Deal
Lisa Cheban | 05 June, 2023 11:31 | Last update on: 05 June, 2023 11:31
Aristocrat Leisure Limited, an Austraila-based entertainment company, has announced the proposed acquisition of NeoGames in a $1.8 billion deal. A Business Combination Agreement compels a copy of the agreement to be availed on the NASDAQ platform.
In an official press release, Aristocrat has confirmed that the company will purchase 100% of NeoGames’ shares in a cash price deal of $29.50 per share. Due to the agreement, NeoGames’ fully diluted equity stands at nearly $1.0 billion. This suggests an enterprise value of $1.2 billion, a premium of almost 104% to the three-month volume-weighted average price of the shares for the period ending May 12 2023, of about US$14.45.
Before the deal is approved, the NeoGames shareholders must give their consent, and the deal must meet various regulatory approvals. A valuation multiple of roughly 15x NeoGames’ Adjusted EBITDA for the 12 months before December 31, 2023, has been placed on the acquisition.
In what should be good news for Aristocrat, the NeoGames Board has advised shareholders to support the acquisition because it believes the deal terms are reasonable. Note that the shareholders of NeoGames collectively own around 20.4 million shares or approximately 61% of the company’s outstanding shares. This group has also signed a contract stating they will support the acquisition.
Aristocrat says existing funds will fund the acquisition. The company has assured everyone that it will continue to have a solid balance sheet after the transaction, with pro forma net debt/EBITDA of about 0.7x from September 30 2022.
NeoGames is an Israeli company that leads in developing gaming content and technological solutions. Their full-service offerings include unique technological platforms and value-added online casino services for iLottery, iGaming, and Online Sports Betting (OSB). The company services over 200 operators worldwide and has employed more than 1,100 people in 50+ regulated jurisdictions.
Four complimentary online RMG business groups comprise the NeoGames group, utilizing a single technological stack. The company’s umbrella includes NeoGames, AspireCore, Pariplay, and BtoBet.
What the Companies Said:
Commenting on the deal, Trevor Croker, Aristocrat’s CEO and Managing Director stated that the merger with NeoGames and the expanding Anaxi would provide Aristocrat a competitive edge in the online RMG market. He said this transaction would support Aristocrat’s vision by giving worldwide iGaming, iLottery, and online sports betting operators a portfolio of end-to-end solutions.
The Aristocrat CEO concluded:
“This proposed acquisition builds on the strength and resilience of our business, expands market opportunities and adds capabilities to unlock our full potential. We remain focused on executing our proven growth strategy, and creating long-term value for Aristocrat shareholders.”
On their part, NeoGames’ CEO and Managing Director, Moti Malul, said the company is thrilled to join Aristocrat and participate in its future growth.
Malul added: “We are very proud of our people and teams that have brought us to a leadership position and delivered achievements across the areas of iLottery, iGaming and Online Sports Betting, which enabled this exciting combination. We have no doubt that together with Aristocrat we will become a global leader in online Real Money Gaming, providing unparalleled products, services and game content to our entire customer base and industry.”
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