Acquisition Of Novomatic UK’s Gaming Technology Group By Inspired Entertainment Complete

Inspired Entertainment, Inc. announced the completion of the acquisition of the Gaming Technology Group (“NTG”) of Novomatic UK Ltd. The brand is a division of NOVOMATIC GROUP, a leading international supplier of gaming equipment and solutions.

Through this acquisition, Inspired will combine its position and expertise in server-based gaming, virtual sports and interactive with NTG’s diversified gaming products and popular content, across a complementary customer base.

NTG is a leading supplier of Category B3, C and D gaming terminals to pubs, arcades, motorway service areas and holiday resorts in the UK, while Inspired is a leading supplier of Category B2/B3 gaming terminals.

Via this purchase, the company will now supply iGaming systems with:

• Associated terminals and content for more than 58,000 gaming machines located in betting shops, pubs, gaming halls, and other route operations
• Virtual sports products through more than 44,000 retail channels
• Digital games for 100+ websites
• A variety of amusement entertainment solutions with a total installed base of more than 19,000 devices

Acquisition Part of Goal to Diversify Inspired’s UK business

Inspired has big plans for the future. The company will draw on each organization’s core strengths in order to:

• Broaden offerings
• Bring differentiated gaming products to new geographies and sectors
• Accelerate key growth initiatives
• Offer enhanced capabilities, field service, content and systems

It is expected that the NTG addition will help diversify the brand’s UK business and allow it to expand into contiguous customer segments with very little overlapping with existing clients.

On the other hand, Inspired’s position and expertise in server-based gaming are expected to accelerate NTG’s transition to the pub gaming sector from analog to digital gaming machines, systems, and content.

By ing forces, the two firms are well positioned to capitalize on further converting NTG’s game library for online deployment.

“This acquisition is transformational for Inspired as it unites two highly complementary businesses to create a company that we expect to be a leader in the gaming industry with innovative content, state-of-the-art technology, and an expansive footprint. We see significant opportunities across the combined companies to accelerate our growth, expand our reach and set new standards for innovation and service in the industry.

The larger scale of the combined organization will offer a one-stop service for gaming, virtual sports, interactive and leisure products – and a complete gaming solution that operators can use to reach players wherever they are, whenever they want to play and in any channel they choose. We expect to be able to deliver meaningful value to our shareholders as the acquisition is integrated,” said Lorne Weil, Executive Chairman of Inspired.

At What Cost?

The acquisition cost the company approximately €104.6 million in cash. Inspired entered into a new term loan facility for £140 million and €90 million and a £20 million revolving credit facility in order to finance the acquisition, pay off existing indebtedness and pay fees and expenses related to the purchase and related financing.

The brand expects to achieve US$12.3 million to US$13.3 million of annual cost synergies across cost of sales and selling, general and istrative costs and excluding one off implementation costs.

It is estimated to be achieved within six months of the closing date. The estimation is based upon the 1.269 USD/GBP spot exchange rate at the time of g of the transaction, through shared costs and increased scale.

Inspired also expects efficient use of shared manufacturing, engineering, software development, field maintenance, and customer service in order to drive growth and cost savings.

Further, the company expects to reduce capital deployed in the pub gaming sector.

Source:

“Inspired Completes Acquisition Of Novomatic UK’s Gaming Technology Group”, inseinc.com, October 1, 2019.