Global games technology company, Inspired Entertainmet, Inc. (NASDAQ: INSE) has agreed to a deal that will see it acquire the Gaming Technology Group (“NTG”) of Novomatic UK, a division of the Austrian NOVOMATIC GROUP, for ‘the EUR equivalent of US$120.0 million in cash.’
The move that will appreciably expand the London-headquartered company’s presence across the gambling machine market in the United Kingdom, is subject to certain regulatory approvals and customary adjustments. The transaction with the fellow gaming group is expected to be finalized in the third quarter of 2019.
“we expect to be able to deliver meaningful value to our shareholders as the acquisition is integrated“
According to the official press release, Executive Chairman for Inspired Entertainment, Inc., Lorne Weil, said…
“The potential acquisition of NTG is transformational for Inspired, enabling us to dramatically increase the size, scale and scope of our business by combining our highly complementary, but largely non-overlapping, businesses. We expect to leverage our superior game content, technology, operational capabilities and respective footprints to augment the existing growth trends for our enterprise.”
Existing supply contracts:
B2 and B3 gaming terminals are already supplied to retail operators in the United Kingdom by the company. And, along with its subsidiaries, Gaming Technology supplies Category B3, C, and D gaming machines to arcades, holiday resorts, motorway service areas and pubs across the island nation in northwestern Europe.
Weil added, “Inspired and NTG currently operate in different segments but have much in common in terms of providing resources for our customers and their consumers. This combination would provide additional resources for our core businesses and combine the great content and machine portfolio from each. We expect to be able to deliver meaningful value to our shareholders as the acquisition is integrated.”
Upon finalization of the acquisition, Inspired would be responsible for managing more than 75,000 gaming machines throughout Europe and the UK.
Inspired Entertainment was established in late 2016 following acquisition company Hydra Industries Acquisition Group’s purchase of Inspired Gaming Group from funds managed by Vitruvian Partners LLP, a British private equity firm, for £200 million.
According to Inspired, through shared costs and increased scale, the deal is expected to attain synergies of between $12.3 million and $13.3 million. The firm additionally expects to benefit from “shared manufacturing, engineering, software development, field maintenance, and customer service.”
Plans for the combined businesses:
Via the Tuesday press release, the company commented on its plans for the future of the now combined entity saying that it would draw from its own core strength as well as those of Gaming Technology Group to augment its portfolio of available products, accelerate key growth initiatives, bring distinct gaming products across new sectors and provide “enhanced capabilities, systems, field service and content.”
Inspired’s UK business will grow courtesy of the deal and it will enter new customer segments. Overlap of existing customers will be minimal as the two companies operate unique categories of gaming machines.
Not included in the deal:
Astra Games Limited’s casino assets are not included in the transaction. Instead, they will be transferred to the wholly owned subsidiary of NOVOMATIC GROUP, Novomatic UK Gaming UK Limited, at or prior to the finalization of the acquisition. The Bridgend-headquartered producer of world-class games [Astra] is one of the subsidiaries of NTG that is to be taken over by Inspired.
Inspired was trading at $7.98, up 0.17 (2.18%) at the time of publication on Wednesday, June 12, 2019.