Aristocrat Leisure (ASX:ALL) to acquire NeoGames for $1.8b

• Aristocrat Leisure (ALL) agrees to acquire leading global iLottery platform NeoGames for A$1.8 billion – valued at US$29.50 apiece
• The transaction represents a premium of roughly 104 per cent to the three-month volume-weighted average price (VWAP) of NeoGames shares for the period ended May 12 of approximately US$14.45
• Aristocrat believes the transaction will accelerate its growth strategy and deliver numerous strategic benefits
• The Australian gaming giant also increased its existing share buyback program by a further $500 million to $1.5 billion, running until May 31
• Shares in ALL dip 0.75 per cent to $38.40 at 11:40 am AEST

Aristocrat Leisure (ALL) has agreed to acquire leading global iLottery platform and NASDAQ-listed NeoGames for US$1.2 billion (A$1.8 billion) at US$29.50 per share.

The transaction represents a premium of roughly 104 per cent to the three-month volume weighted average price (VWAP) of NeoGames shares for the period ended May 12 of approximately US$14.45.

Aristocrat believes the deal will accelerate its growth strategy and deliver strategic benefits. These include positioning the company with global scale and capability in the growing online RMG segment, plus delivering “exciting” revenue opportunities.

“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,” Aristocrat CEO and Managing Director Trevor Croker said.

“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.”

Additional benefits noted were “significant” international growth opportunities across the online RMG industry, entry into an “attractive” iLottery market, adding the experience of NeoGames, and delivering “attractive” financial returns and growth.

The NeoGames’ board recommended its shareholders vote in favour of the deal – with around 61 per cent of its outstanding shares already agreeing to vote in favour.

The Australian gaming giant confirmed the acquisition would be funded with existing cash.

Given its strong cash flow and post-acquisition balance sheet, Aristocrat also announced it was increasing its existing on-market share buyback program by a further $500 million, bringing it to up to $1.5 billion until May 31, 2024.

Shares in ALL dipped 0.75 per cent to $38.40 at 11:40 am AEST.