Australia's Aristocrat Leisure to buy Israel's NeoGames for $1 billion; shares soar
By Upasana Singh
(Reuters) -Australia's Aristocrat Leisure on Monday said it will acquire Israel-based online gaming solutions provider NeoGames SA for about $1 billion, leading the target's shares 120% higher in premarket trading.
U.S. shares of NeoGames were trading at $28.22 before the bell, while Aristocrat ended 2.1% higher at A$39.51.
Aristocrat will pay $29.50 per share to shareholders of the Nasdaq-listed firm for 100% of its shares, representing a premium of about 130% to NeoGames' last close of $12.84.
The takeover will give Sydney-based Aristocrat entry into the attractive but highly regulated iLottery market, and facilitate further penetration across other online real-money gaming (RMG) verticals, it said in a statement.
"This deal completes the RMG build-and-buy strategy," analysts at Citi wrote in a note, adding that "while Aristocrat has paid a very significant premium, this deal clearly unlocks a runway to sustained growth."
Aristocrat has been keen on accelerating its strategy to grow the RMG sector for a few years, including the acquisition of Roxor Gaming in September.
NeoGames provides content and technology solutions for the online RMG industry. Its group of companies include sports betting solution provider BtoBet and content provider Pariplay.
"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," said Aristocrat CEO Trevor Croker.
In separate statements, NeoGames said it has recommended the offer, while Aristocrat said shareholders representing 61% of NeoGames' outstanding shares have agreed to vote in favour of the deal.
Aristocrat expects the acquisition to add to its profit in financial year 2025.
Separately, it also announced an increase of A$500 million ($339.2 million) to its existing share buyback program.
Early last year, Aristocrat's 2.1 billion pounds ($2.65 billion) bid for gambling software company Playtech fell through after the British firm's shareholders rejected the buyout offer.
($1 = 1.4743 Australian dollars)
($1 = 0.7923 pounds)
(Reporting by Upasana Singh and Riya Sharma in Bengaluru; Editing by Cynthia Osterman, Chris Reese and Varun H K)
