Aristocrat Leisure Buying NeoGames for $1.2B in Cash

Aristocrat Leisure (ASX: ALL), ace of the largest expansion slot machine manufacturers, is increasing its iGaming footmark with a $1.2 1000000000000 all-cash acquisition of NeoGames (NASDAQ: NGMS).

The sell announced later(a) Sunday values NeoGames at $29.50 a share, or a 104% premium to the stock’s average out closing terms for the tercet months ending May 12. NeoGames operates cyberspace drawing games inwards the US, Canada, and other markets worldwide.

Completion of the dealing is expected to come within 12 months, and is contingent upon customary closure conditions, including receipt of regulatory approvals and the approval of NeoGames’ shareholders,” according to a statement. “NeoGames shareholders who throw a sum of around 20,382,242 shares, representing roughly 61% of NeoGames’ salient shares, make executed a supporting accord with Aristocrat pursuant to which they feature irrevocably in agreement(p) to voting in favor of the transaction.”

NeoGames’ get on of directors voted unanimously inwards favour of the takeover. Upon closing of the deal, the cyberspace drawing unbendable testament become a completely owned subsidiary of Aristocrat.

Win-Win for Aristocrat, NeoGames Investors

With the takeover terms representing a 130% insurance premium to where NeoGames shares closed in(p) in conclusion Friday, recent investors inwards the gillyflower are benefiting. The inventory slid 10.77% on May 12 but is higher past 5.33% year-to-date.

“While we remain believers inward the long-term, high-quality iLottery opportunity, the likely gradual rollout crosswise the US, linked with a difficult macro environs for illiquid stocks, presented a thought-provoking outlook for near-to-medium-term toll discovery,” wrote Stifel psychoanalyst Jeffrey Stantial inwards a Dominicus note.

Stifel acted as an advisor to NeoGames. In the US, Newmarket is the target’s cover market, and NeoGames is also operational in New Hampshire, Frederick North Carolina, and Old Dominion and is pursuing iLottery contracts inward Alaska, Connecticut, Maryland, Massachusetts, Missouri, Ohio, and Oregon.

As for Aristocrat, the Australian company lands an boulevard for increasing its iGaming and online lottery step next the 2022 collapse of its attempted acquisition of Playtech (LSE: PTEC). Aristocrat may also follow able-bodied to break leveraging Aspire Global, which NeoGames acquired early lowest year. That Swedish companion is a business-to-business engineering solutions provider to online sports betting and casino operators. I

ts partners include well-known operators, such as 888 Holdings, Betfair, Entain, Flutter, and William Hill.

Aristocrat/NeoGames Deal Spotlights iLottery

While iLottery has been slow to get hold of sour congener to iGaming and online sports betting, it stock-still offers a compelling growing trajectory — single highlighted by Aristocrat’s purchase of NeoGames. The acquisition could also follow a boon for other companies with internet lottery exposure, including International Game Technology (NYSE: IGT).

We perform control a voting of confidence inwards Aristocrat opting to broaden alfresco of the core gambling casino byplay into iLottery. Hence, we contend the trade reads favorably for Buy-rated IGT, though acknowledging that iLottery remains a small piece of IGT’s revenue base,” added Stantial.

The NeoGames purchase also provides a runway for Aristocrat to break contend among US-centric rivals, including IGT and Light & Wonder (NASDAQ: LNW).