Aristocrat Acquisition of NeoGames: Expanding in the Gaming Industry

NeoGames, the omnichannel provider known for its diverse portfolio in iGaming, sports betting, lottery, and player account management, is set to be acquired by Aristocrat in a significant deal worth $1.2 billion.

This announcement adds to the already buzzing gaming M&A landscape in Australia following Fanatics’ recent purchase of PointsBet’s US business.

Valued at $29.50 per share, the acquisition positions Aristocrat, a significant player in the industry, to expand its market presence. NeoGames, which emerged through a series of acquisitions, boasts prominent brands like Pariplay, BtoBet, and Aspire Global under its ownership.

Who is Aristocrat?

With its inception in 1953 by the esteemed Len Ainsworth, Aristocrat Leisure Limited has established itself as a prominent player in the gaming industry. In 1996, the company achieved another significant milestone by becoming listed on the Australian Stock Exchange.

Backed by over 60 years of experience and a dedicated workforce of more than 2,200 employees worldwide, Aristocrat has gained a strong foothold in the manufacturing and distribution of slot machines and other gaming products. The company’s license spans 200 regions, enabling them to cater to a vast international market.

They also specialise in computerised table games, electronic card games, and trademarked jackpot setups like the patented Hyperlink system. Another unique feature is the Reel Power system, where players purchase reels instead of lines, creating winning combinations in the classic arrangement.

Aristocrat’s Pursuit of NeoGames

NeoGames, a software provider founded in 2005 and headquartered in Luxembourg, has achieved remarkable success and garnered a strong reputation in the industry. NeoGames has emerged as a major player in the development of scratch cards, establishing itself as one of the leading developers in this market segment.

Aristocrat had previously been in talks to acquire supplier Playtech in late 2021. However, the deal fell through in 2022. Undeterred, Aristocrat redirected its attention towards NeoGames, recognising the company’s impressive growth trajectory and unique assets in the iLottery, iGaming, and online sports betting sectors.

NeoGames’ Success and Outlook

Despite reporting a slight net loss in its recent Q1 report, NeoGames has demonstrated robust revenue growth. NeoGames Chairman John E. Taylor expressed satisfaction with the recognition of the value the company has created as a leader in its fields. Highlighting the significance of the acquisition, NeoGames CEO Moti Malul emphasised the strategic opportunity to merge the two businesses, ultimately benefiting shareholders, customers, and employees alike.

Future Plans and Shareholder Support

Upon completion of the acquisition, NeoGames will become a wholly owned subsidiary of Aristocrat, ceasing its listing on any public market. The transaction is subject to regulatory approvals in gaming, antitrust, and foreign investment and is expected to be finalised in 2024. Shareholders holding approximately 61% of NeoGames’ outstanding shares have expressed their support for the deal. Major shareholders include NeoGames founder Barak Matalon, Israeli soccer agent Pini Zahavi, and businessman Eli Azur.

Conclusion

Aristocrat’s acquisition of NeoGames marks a major milestone in the gaming industry, solidifying the former’s position as a critical player in the market. With NeoGames’ diverse portfolio and robust platform, both companies are poised to leverage their complementary strengths and create synergies in iLottery, iGaming, and online sports betting.