Aristocrat will acquire NeoGames bringing brands such as Aspire Global, the NeoGame iLottery products, and the online slots collection by PariPlay. On top of this, it also means the Aussie casino supplier will own the world-class sports betting solution BtoBet.
We knew Aristocrat was in the market for a top-level iGaming company ever since the interest of the Aussie online casino and land-based gaming machine giant’s interest in Playtech. However, it seems the interest in Playtech is certainly off the cards – not that it wasn’t already.
Aristocrat has found itself a new brand to diversify its current B2B services portfolio. With the Aussie pokies and the gambling market in general, in constant fluctuation when it comes to regulations, Aristocrat has long been on the lookout to branch out.
It seems the Australian casino firm has found its perfect match in the form of Israel’s NeoGames. The company will pay $29.50 per share for NeoGames SA, which is currently floated on the NASDAQ under the ticker NGMS. That’s some value as the current price of shares at this time (the market still has not opened) is $12.84.
Total price: With the agreed rate of $29.50 per share, Aristocrat will pay $1.2 billion (USD), which is around AU$ 1.8 billion. Shareholders can expect a 108% premium at this rate!
Why is NeoGames a good fit for Aristocrat?
NeoGames is a successful brand that has several layers to its business. This includes last year’s acquisition of Aspire Global, a global reach in iLottery, and online slots.
- Online Slot Portfolio: Another reason is that NeoGames is an established video slot developer in the global iGaming niche thanks to its PariPlay software provider division. The company has over 100 games including, while NeoGames itself also has over 100 slots.
- Sports Betting Online: BtoBet is a well-established sports betting brand that uses the Neuron3 Player Account Management service with access to Europe, LATAM, and African continents.
- Access to New Markets: Aside from BtoBet’s market access, Pariplay holds licensing in Ontario Canada, the UK, Malta, Romania, Michigan USA, and many other jurisdictions. This gives Aristocrat new market access across the globe.
- Profitability: The total NPI revenues for NeoGames reported in Q1 2023 came in 187% up year on year. That’s $64.3 million on its $22.4 million Q1 2022 figures. In the iLottery section, the company increase revenue by 8.7% y-o-y, and the acquisition of Aspire Gaming added $55.8 million in revenue, which would be a 20.5% y-o-y growth had the company owned Aspire Gaming in Q1 2022.
- Location, Location, Location: The company is based out of Israel, which is a well-known centre for iGaming companies, meaning there is experience in casinos and the local workforce to utilise. Companies like Playtika, 888 Holdings, and Playtech also operate from the country.
Other Aristocrat Brands: Anaxi is the current Aristocrat brand for its online slots. A new name was given to its slot portfolio to conquer new markets as well as existing ones. Also, Pixel United is the company’s mobile-focused gaming platform and fishing games.
Historically iGaming Companies Buy to Diversify
If you are a casino company worth billions and you have your fingers in multiple pies, even then the current markets may not be enough for growth. This is especially true for companies like Playtech, Evolution and Aristocrat because their firms come with the added obligation of keeping investors happy – especially those on the stock markets.
- Playtech (London Stock Exchange): Companies like Playtech have long been in the business of purchasing smaller software providers to expand their reach. The company already produces one of the most popular networks of jackpot slots – Age of the Gods as well as a number of popular online slots with jackpot and live dealer games. That didn’t stop Playtech from branching out and buying Quickspin, Aristocrat Lotteries, Psiclone Games, Playtech Vikings, Playtech Origins, Rarestone Gaming, and Eyecon.
- Evolution (NASDAQ Stockholm): Another example is Evolution on the live dealer scene. The company has a strong foothold in live dealer gaming. However, to expand, online slots were key, so Evolution took over NetEnt (also on the NASDAQ Stockholm at the time), Big Time Gaming, NoLimitCity and Red Tiger Gaming. Evolution also owns land-based company DigiWheel – a wheel of fortune tech specialist for gameshows.
News of the purchase of NeoGames now expands the company’s horizons. And it already seems to have had a slight effect on the company’s stock market price with its share price rising up from AUD 38.69 to AUD 39.95.
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