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Inspired Entertainment to Acquire Novomatic's Gaming Technology Group For $120 Million
June 13, 2019 Andrej Vidovic
Inspired Entertainment has reached an agreement with Austrian gaming solutions giant, Novomatic, regarding the purchase of their UK-facing division, Gaming Technology Group (GTG). The agreed price of the acquisition is $120 million.
With the finalization of the deal, Inspired will become the sole owner and take complete control of six brands that fall under the GTG umbrella: Gamestec Leisure, Playnation Limited, AstraGames Limited, Bell-FruitGroup Limited, Harlequin Gaming Limited and Innov8 Gaming Limited.
An Opportunity For Diversification
According to Inspired Entertainment’s executive chairman, Lorne Weil:
“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.”
In part, this company’s motive behind this venture is that GTG’s games businesses of B3, C and D category…
…would complement their own B2 and B3 operations, which practically means they will be able to diversify their UK business and expand into new sectors.
What Each Brand Does
From the companies mentioned that will be bought as a part of the package, Gamestec is in charge of supplying the UK pub sector with gaming machines. Playnation delivers terminals to the UK holiday and leisure industry. Innov8 Gaming develops gaming machines and provides B3 and C category machines.
Bell-Fruit Group sells Category C machines and delivers them to European markets. AstraGames creates gaming machines of Category B, C and D, while Harlequin Gaming works as the game development studio that distributes content to AstraGames and Bell-FruitGroup.
Looking For Meaningful Value
Weil went on to explain the subsequent strategy that pushed his company towards this business move:
“Inspired and NTG currently operate in different segments but have much in common in 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.”
Still There Are Formalities to be Done
Through shared costs and increased scale, Inspired is looking to achieve a minimum of $12.3 million in synergies…
…and they’re also willing to make the most of shared manufacturing, engineering, software development and customer service which should all be of great help for maintaining growth and saving money once the transaction ends. There are regulatory approvals that this acquisition must go through first, before getting completed in the third quarter of the year.
Once the deal is done, Inspired will be managing over 75,000 gaming machines in all of the UK and parts of Europe. In May, the company itted to a 10.1% first quarter year-on-year decline in revenue to $33.7 million, mostly due to the poor performance of gaming division that is based on servers.
Source:
“Inspired Announces Agreement to Acquire Novomatic UK’s Gaming Technology Group”, inseinc.com, June 11, 2019.
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Interesting, we will see how this plays out. Novomatic is ridiculously powerful so it’s maybe a smart move on their behalf that they’re selling this.