Australia’s Aristocrat Leisure to acquire Israeli online iLottery gaming provider NeoGames for $1 billion

Australia’s Aristocrat Leisure announced on Monday it has agreed to acquire Israel-based online interactive lottery solutions provider NeoGames SA in a deal valued at around $1 billion, Reuters reported.

The Sydney, Australia-based Aristocrat said the acquisition of NeoGames will provide the company with a strategic entry into the lucrative yet tightly regulated iLottery market. In addition, the takeover will enable Aristocrat to expand its presence in various other online real-money gaming (RMG) sectors, enhancing its overall market penetration, the company said in a statement.

As part of the acquisition agreement, Aristocrat has committed to purchasing all outstanding shares of NeoGames, a company listed on the Nasdaq. The agreement outlines that Aristocrat will compensate NeoGames’ shareholders at a rate of $29.50 per share, encompassing the entire 100% ownership of the company. This proposed offer signifies a substantial premium of approximately 130% compared to NeoGames’ closing share price of $12.84 before the agreement was reached.

“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 actively pursuing its growth strategy in the real-money gaming (RMG) sector, and this includes the recent acquisition of Roxor Gaming in September. As part of its expansion efforts, Aristocrat has set its sights on NeoGames.

NeoGames is a company that specializes in offering content and technology solutions for the online RMG industry. It comprises a group of companies, including BtoBet, which provides sports betting solutions, and Pariplay, a content provider. These acquisitions will bolster Aristocrat’s presence and capabilities in the RMG market, allowing them to offer a more comprehensive suite of products and services to their customers.

“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, both NeoGames and Aristocrat have expressed their positions regarding the acquisition. NeoGames has stated that it recommends the offer put forth by Aristocrat. On the other hand, Aristocrat has disclosed that shareholders representing approximately 61% of NeoGames’ outstanding shares have agreed to support the deal by voting in favor of it.

Aristocrat foresees that the acquisition will contribute positively to its profits in the financial year 2025, indicating its optimistic outlook for the future benefits of the transaction. Additionally, Aristocrat has separately announced an expansion of its existing share buyback program by A$500 million ($339.2 million), underscoring its commitment to returning value to its shareholders through this capital allocation strategy.

Founded in 2005, NeoGames is a provider of online interactive lottery solutions and services. The company also offers a comprehensive platform that enables national and state lotteries to expand their operations into the online space, providing players with a secure and convenient way to participate in lottery games.