igamingnext photo
Australian gaming giant Aristocrat Leisure has agreed to acquire iLottery and iGaming solutions provider NeoGames in an all-cash transaction.

The deal values NeoGames at approximately $1.2bn, with shares purchased at a price of $29.50 each.

This represents a 104% premium over the company’s three-month volume weighted average stock price.

ASX-listed Aristocrat has been exploring opportunities to enter the rapidly growing RMG space following the collapse of its attempt to acquire industry giant Playtech.

The company subsequently established its dedicated RMG gaming division called Anaxi.

Nasdaq-listed NeoGames provides end-to-end solutions for regulated lotteries and gaming operators. It flexed its own M&A muscles last year with the purchase of Aspire Global.

Their suite of services includes iLottery, iGaming, and online sports betting, with four complementary business units: NeoGames, AspireCore, Pariplay, and BtoBet.

Strategic rationale

“Bringing together NeoGames and our growing Anaxi business will position Aristocrat with global scale and capability in the growing online RMG industry,” said Aristocrat CEO and managing director Trevor Croker.

“We see great opportunities in the combination of our complementary businesses, with clear revenue and growth potential that comes with a complete and seamless online RMG solution.

“This proposed acquisition builds on the strength and resilience of our business, expands market opportunities and adds capabilities to unlock our full potential,” he added.

“This proposed acquisition builds on the strength and resilience of our business, expands market opportunities and adds capabilities to unlock our full potential.”

Aristocrat CEO and managing director Trevor Croker

Aristocrat said the acquisition will provide significant international growth opportunities across the online RMG industry, particularly in the large North America segment.

Moreover, the entry into the highly regulated iLottery market is expected to facilitate further penetration across other online RMG verticals.

Finally, Aristocrat anticipates that the acquisition will deliver attractive financial returns and growth, with the acquisition being EPSA accretive from the first full year of Aristocrat ownership (FY25).

During an investor presentation, Croker emphasised the importance of NeoGames’ “solid technology stack” as a key factor behind the acquisition.

“It’s got a proven PAM that is now used in a number of markets in Europe and offers the ability to then leverage that PAM into the North American market as well,” he added.

Croker further disclosed that discussions between Aristocrat and NeoGames had been ongoing for the past year.

“It was about understanding them as people, understanding their business, understanding the markets, understanding their technology, and really getting to the core of what drives their organisation as a whole,” he explained.

Key executives to stay on

Meanwhile, NeoGames CEO Moti Malul commented: “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 recognises 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.”

Members of NeoGames’ management team, including CEO Malul, president and head of gaming Tsachi Maimon and COO Rinat Belfer, have agreed to stay with NeoGames under Aristocrat ownership.

Terms of the agreement

Under the terms of the agreement, NeoGames has agreed to transfer its statutory seat, registered office and seat of central administration from Luxembourg to the Cayman Islands.

Moreover, a wholly owned subsidiary of Aristocrat will merge with and into NeoGames, with NeoGames being the surviving company and a wholly owned subsidiary of Aristocrat. NeoGames will become a privately-held company and no longer be listed on any public market.

The transaction is to be completed within 12 months, and is subject to, among other things, NeoGames’ shareholder approval and certain regulatory approvals.

However, NeoGames’ board of directors unanimously approved the agreement and has recommended the transaction, while shareholders representing 61% of NeoGames’ outstanding shares have also already agreed to vote in favour.

Aristocrat requires 66.7% of NeoGames’ shareholders’ approval to proceed with the transaction and initiate the regulatory approval process.