Nasdaq-listed NeoGames to acquire Aspire Global in all-cash SEK4.3bn deal

US lottery supplier NeoGames is primed to purchase iGaming platform provider Aspire Global in an all-cash deal worth up to SEK4.32bn (€418.2m/£349.6m/$476.4m).

Aspire Global’s bid committee, formed of independent directors Carl Klingberg and Fredrik Burvall, has unanimously recommended that shareholders accept NeoGames’ all-cash alternative offer.

The Nasdaq-listed lottery business first made its public tender offer yesterday (17 January).

That bid offered Aspire shareholders the option to tender all their shares in the business for a mix of cash and newly issued NeoGames shares in the form of Swedish depository receipts, with alternative acquisition structures allowing for all-stock or all-cash versions of the deal.

Aspire’s main shareholders Barak Matalon, Pinhas Zahavi, Elyahu Azur, Aharon Aran and Oded Gottfried, who together own around 31.2m shares, or 67% of the business, have irrevocably and unconditionally undertaken to accept the alternative offer, allowing shareholders to receive an all-cash consideration for their shares.

The price per share, set at SEK111, represents a premium of 41.4% on Aspire’s previous closing price of SEK78.50. 

For shareholders who choose to receive 100% of the consideration in cash, the last 12 months EBITDA multiple would be 16.8x, Aspire said, while the multiple for those electing to take a mix of equity and cash on a 50/50 basis would be 13.6x.

Aspire’s bid committee has appointed Oakvale Capital LLP as financial adviser, while Öhrlings PricewaterhouseCoopers AB (PwC) has been retained for issuing a fairness opinion in relation to the offer.

PwC determined that the all-cash offer is fair from a financial point of view, while the combined stock and cash options are not fair given the current share price of the acquiring company NeoGames.

An offer document is expected to be published in early April, and the acceptance period for the offer is expected to run from 5 April until 3 May this year. The expected settlement date of the offer is 7 May.

NeoGames said: “The combined company will be led and supported by the market-leading capabilities of an experienced, joint management team.

“Having worked together successfully in the past, NeoGames’ and Aspire Global’s management teams represent a strong cultural fit as each focus on innovation and a customer-centric approach to their respective markets and products.”

The combined company is expected to be led by Moti Malul, current CEO of NeoGames, with existing CFO Raviv Adler also maintaining his role. Aspire Global CEO Tsachi Maimon is expected to join NeoGames as president and lead the company’s newly formed online gaming division.

“I strongly believe that the two companies are well matched with a solid cultural connection forged over many years of working together which will facilitate meaningful revenue synergies,” said Maimon.

“The deal will allow us to leverage NeoGames’ presence in the US to grow even further in this market while continuing to roll out new products and support the growth of our regulated clients in Europe, Latam, Africa and North America,” he added. 

NeoGames’ existing board of directors will remain in place and will be responsible for governance of the combined entity. Both Aspire Global and NeoGames are founded by the same individual; Barak Matalon.

Aspire Global shares are trading at SEK108 at the time of writing, slightly below NeoGames’ SEK111 per share valuation and up 37.6% on yesterday’s closing price of SEK78.50.

The business refocused its efforts on the B2B sector towards the end of 2021 by divesting its B2C segment to Nasdaq-listed Esports Technologies in December.

Aspire’s most recent financial report, covering Q3 2021, showed revenue and profit had increased some 40% year-on-year during the first nine months of the year to €159.4m, giving the business EBITDA of €21.1m and net income of €18.3m – or €0.39 per share.