Under the deal, Aristocrat will pay $29.50 per share in NeoGames in an all-cash transaction. This represents a premium of approximately 104% over the volume weighted average price of NeoGames’ shares for the three months to 12 May, the last trading day prior to the deal.
The agreement terms stated NeoGames would transfer its statutory seat, registered office and seat of central administration from Luxembourg to the Cayman Islands. An Aristocrat subsidiary would then merge with NeoGames, with the latter being the surviving company and become a wholly owned subsidiary of Aristocrat.
NeoGames’ board unanimously approved the deal, while NeoGames shareholders who hold 20,382,242 shares, representing approximately 61% of NeoGames’ outstanding shares, have executed a support agreement with Aristocrat to vote in favour of the transaction.
Subject to customary closing conditions, including receipt of regulatory approvals and the approval of NeoGames’ shareholders, the acquisition is expected to close within 12 months.
“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,” NeoGames chairman, John E Taylor Jr, said.
“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.”
Aristocrat chief executive and managing director, Trevor Croker, 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.
“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. We remain focused on executing our proven growth strategy and creating long-term value for Aristocrat shareholders.”
The announcement comes after NeoGames last week revealed that amortisation and interest expenses related to its acquisition of Aspire Global pushed the business into a net loss in its first quarter.
A 187% year-on-year increase in revenue, which rose to $64.2m from $22.4m the business achieved in the same period of the previous year, reflected “primarily” the business combination with Aspire.
Completed in June 2022, the $423.5m deal saw the business merge with the igaming solutions provider, then CEO Tsachi Maimo becoming company president and leading the newly formed igaming division. This igaming segment reported $35.1m in revenue in the first quarter of 2023.
The business’ ilottery segment – which was not affected by the acquisition – grew 8.7% on an annual basis to $14.4m from $13.3m.