Australia’s Aristocrat to buy Israel’s NeoGames in deal worth $1.2 billion

Israeli-founded online gaming firm NeoGames has inked a deal to be acquired by Australia’s Aristocrat Leisure at an enterprise value of $1.2 billion.

As part of the deal, Aristocrat, an entertainment and content creation company for mobile and casino games, will pay $29.50 per share to buy 100% of Nasdaq-listed NeoGames in an all-cash transaction. The price tag represents a premium of almost 130% to NeoGames’s last closing of $12.84 on May 12. The acquisition values NeoGames’s fully diluted equity at about $1 billion, Aristocrat said in a statement.

Founded in 2005, NeoGames is an online gaming technology and services provider for national and state-regulated lotteries and gaming operators. The firm has developed a proprietary technology platform for online lottery games to be played via personal computers, smartphones and handheld devices. It also has two game studios and a sports betting platform. Headquartered in Tel Aviv and incorporated in Luxembourg, NeoGames employs about 1,100 workers and has more than 200 customers operating across more than 50 regulated markets.

Sydney-based Aristocrat, which has 7,500 employees in over 20 locations around the world, operates a range of products and services including electronic gaming machines, casino management systems and free-to-play mobile games.

Aristocrat said the acquisition is part of its strategy to increase the company’s exposure to the $81 billion online real-money gaming (RMG) industry and facilitate its entry into the attractive iLottery market. The three areas in the RMG space are iGaming, iLottery and online sports betting.

“Bringing together NeoGames… will position Aristocrat with global scale and capability in the growing online RMG industry,” said Aristocrat CEO Trevor Croker. “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.”

Under the terms of the acquisition agreement, NeoGames will transfer its statutory seat, registered office and seat of central administration from Luxembourg to the Cayman Islands and will become a wholly owned subsidiary of Aristocrat. Upon completion of the merger, NeoGames will become a privately held company and no longer be listed on any public market.

Shareholders, who hold about 61% of NeoGames’ outstanding shares, have expressed support for the transaction, NeoGames said. The main shareholders are NeoGames founder Barak Matalon, Israeli soccer agent Pini Zahavi and businessman Eli Azur.

The acquisition is expected to be completed during 2024, pending gaming regulatory, antitrust and foreign investment approvals.

“We are excited to join one of the world’s most successful and respected gaming companies and be able to play a significant role in its future growth story,” said NeoGames CEO Moti Malul. “We have no doubt that together with Aristocrat we will become a global leader in online Real Money Gaming, providing unparalleled products, services and game content to our entire customer base and industry.”